Atol-protection for cancelled holiday refund credit notes could be extended

The Civil Aviation Authority (CAA) could extend the refund credit note (RCN) scheme to ensure Atol-protected RCNs can continue to be issued from 1 October.

At present, the protection is due to end on 30 September.

Tour operators and travel agents increasingly started issuing RCNs instead of cash refunds to customers whose holidays had been cancelled due to the coronavirus pandemic.

The credit note essentially acts as an IOU, which travellers can use for booking a future holiday or, after a certain point, exchange for a cash refund.

Their widespread usage helped travel companies stay afloat when dealing with thousands of customers who were owed refunds.

In July, the government finally confirmed that these RCNs were Atol-protected, meaning that customers’ money was still safe even if the holiday company they’d booked through went bust in the meantime.

The protection was guaranteed for RCNs issued between 10 March and 30 September; at the time, the CAA advised that Atol-protection “currently will not apply” to RCNs from 1 October.

But as the industry enters a similarly challenging winter season, the organisation is reportedly having a rethink.

An industry insider told Travel Weekly that the CAA is “looking at it” and is “aware of the urgency”.

“The world has moved on [since the deadline was set],” they added. “The reality is the early winter market is going to be adversely affected [by quarantine restrictions].

“The crisis is not averted. If anything, it’s likely to become more difficult.”

For those who accepted an RCN but have now had a change of heart, they still have until 30 September 2021 to exchange it for a full cash refund.

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