Has Brexit Put Package Holidays at Risk?

Rajeev Shaunak, head of travel & tourism, MHA MacIntyre Hudson, comments below on the Brexit bottleneck delaying new travel regulation, and urgent action needed to address concerns on the future of air travel and holidays.

Consultations for the new Package Travel Directive (PTD) started in Autumn last year but have been dogged by delays and are well behind schedule. The 1 January 2018 deadline to transpose its requirements into UK law has been missed, with lawmakers distracted by the masses of Brexit activity at the end of last year. Brexit has overridden many government department plans in the last 12 months, causing delays and leading to growing concerns around the future of air travel and holidays within the EU and further afield. Although few agreed with Michael O’Leary of Ryanair when he warned that flights could simply stop after Brexit, that worry has been confirmed by the EU Commission as a potential outcome if no new agreement is reached.

The PTD seeks to address changes in how consumers book holidays, as more and more travellers move to book their trips via online travel websites. The Directive will extend legal protection beyond traditional tour operators. Travel businesses which create packages for customers involving two or more travel arrangements, for example the flight and hotel, will now be responsible for all elements within this package. They must also make the new regulation rights extremely clear on their websites.

New agreements on ‘Open skies’ within Europe and also to the US, currently based on EU agreements, must be reached within the next six months to enable operators and airlines to produce their plans for 2019 by mid-summer this year. The issues run deep; many UK citizens are employed as overseas representatives and managers, and may lose the right to work after March 2019; yet the UK government gives the impression that everything will be resolved ‘in time’.

Without urgent action, the second half of 2018 could be nerve-racking for the UK travel industry. Despite PTD being a European initiative, the UK government has made it clear that it will implement it, perhaps in the hope of currying favour to obtain a better outcome for the current negotiations. With the implementation date fast approaching on 1 July 2018, there are serious doubts over whether this deadline can be met by the government and the travel industry itself. Combined with other developments such as the EU ban on card surcharges and GDPR, the industry is rife with issues to contend with; to succeed in this environment, travel companies will need to carefully review their business structures to manage both their costs and data obligations.

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