September 23, 2008

Bid to Help V Ictims of Collapsed Tour Firms Read Insurance Small Print, MEP’s Advice Leaflet Urges


A CAMPAIGN has been launched to raise awareness among holidaymakers of what to do if a tour operator goes bust.

With concern mounting that more companies may go the way of XL and Seguro Holidays, whose collapse left thousands of people requiring emergency flights back to the UK, an appeal has gone out for greater awareness of how holidays cover operates.

Customers are particularly being urged to read the fine print of travel insurance and other cover, to avoid being stranded in the event of an operator collapsing.

The advice includes booking flights and accommodation using a credit card, ensuring package holidays are covered by the Atol scheme, run by the Civil Aviation Authority (CAA), and buying comprehensive travel insurance.

The collapse of several tour operators, and budget carrier Zoom Airlines, in the past month has exposed holes in insurance policies and industry-backed protection schemes which have left tourists struggling to return home.

Atol covers package holidays offered by tour operators, it does not normally offer protection for flights purchased on their own. Only a handful of travel policies provide cover for an airline or holiday company going bust.

Alyn Smith, the SNP MEP, will today publish an advice leaflet urging travellers to learn their rights under European laws - and to ensure they are aware of what they do not cover.

"The collapse of Zoom Airlines and XL saw an unprecedented number of Scots stranded abroad. Unfortunately, those who were not protected by their credit card company, insurance policy or the Civil Aviation Authority Scheme were left to foot the bill home. This could potentially be a hugely expensive affair, especially for a family who may have to pay for three or four new tickets home.

"I have launched this campaign to make Scots aware that they do have rights and entitlements as an airline passenger under European law, " Mr Smith said. "And secondly, I wanted to provide helpful, user-friendly information they can use to help protect themselves in the event of any future delay or cancellation " Under the Montreal Agreement, citizens of the European Union are entitled to financial compensation if they suffer long delays, cancelled flights or lost luggage.

However, Mr Smith warned that the EU legislation would give scant protection if a travel firm went bust, as passengers' compensation demands were likely to be written off by administrators.

Some 90,000 holidaymakers were stranded when XL went into administration on September 12 - not all of them covered through Atol.

The CAA announced at the weekend that 38,000 tourists are due to be repatriated this week after XL holidays in Spain, Greece, Sardinia, Portugal, Egypt, Barbados, the Caribbean, Cyprus and Florida. An unprecedented operation brought back 46,765 passengers last week on 199 special flights.

Richard Jackson, CAA director of consumer protection, said of the travel industry's response to XL: "Their important contribution has greatly helped the smooth repatriation "

What cover is there?

Montreal Agreement This piece of European legislation gives rights to EU citizens to seek financial compensation in the event of delays, cancelled flights and lost or delayed baggage. But it is questionable how much use these rights would be if an airline or tour operator goes bust.

Travel insurance A similar problem exists with most insurance policies: while they are fine in most cases, many do not cover the collapse of travel firms. The Post Office, Marks & Spencer and Axa Direct offer policies which include such cover. Swiftcover charges GBP1 to upgrade its policy to this level.

Credit cards Using credit to purchase goods or services offers consumers protection as the credit company is liable for any loss suffered, under British law. MEP Alyn Smith urged holidaymakers to ensure they had enough credit on their card to pay for an emergency flight home.

Originally published by Newsquest Media Group.

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