Bought a BA Holiday, ‘flight and hotel’ or ‘flight and car’ package? You are losing your right to a cash refund.

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The Independent reports today that the Government is about to suspend the rules which guarantee you a swift refund when you cancel a package holiday.

The article is here.

One intriguing feature of my inbox in recent weeks has been the number of people complaining about British Airways making it very difficult to get a cash refund for a flight booking.

And yet, for every five complaints I got about flight refunds, I would get one praising British Airways and saying how wonderful they were for refunding a ‘flight and car’, ‘flight and hotel’ or BA Holidays package virtually instantaneously.

This was not an act of generosity, however.

Under the 2018 Package Travel Regulations, a holiday company is legally obliged to refund your holiday in full, in cash, within 14 days of it being cancelled.  There is no leeway.

(On paper, there is also no leeway under EC261 about not refunding ‘flight only’ bookings either, but the penalties for flouting those rules are not as strict.)

The European Commission ruled on Friday that this structure no longer made sense and was likely to drive every holiday company to the wall within weeks.

Under the proposed new rules, a holiday company can now provide a voucher or a credit note for a cancelled holiday.  There is one caveat though – there must be a legally binding guarantee in place that protects the voucher if the holiday company which issued it goes bust.

According to The Independent today, the UK Government is about to announce that it will underwrite ATOL to act as ‘funder of last resort’ to credit notes issued by holiday companies.

It will agree to backstop the value of credit notes for a period of two years.  If the holiday company goes into receivership during that time, ATOL will provide a cash refund for the credit note.

The article also implies that there will be a mechanism to cash out the voucher regardless of whether the tour operator has gone bust, but this is not clearly explained.  Obviously you can’t be allowed to refund your voucher for cash immediately or there would be no benefit in putting the ruling in place.  It also makes little sense for ATOL to pay out a cash refund if the tour operator is still trading and could pay you directly.  It may be that the ‘take the cash’ option is only valid after the two years is up.  Hopefully the official announcement will provide some clarity here.

For most Head for Points readers, the effect of this will be to put ‘flight and hotel’, ‘flight and car’ or BA Holidays ticket holders into a WORSE position than people who simply have a flight booking.

Anyone with a flight only booking will remain legally entitled to a full cash refund once their flight is cancelled.

This is a reverse of the current position, where purchasers of packages were guaranteed a refund within 14 days whilst ‘flight only’ passengers have had to fight British Airways for the cash refund they are due with the website and emails actively encouraging people to accept a voucher.

You can find out more on The Independent website here.

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  1. Is the voucher for the cash amount you’ve paid or for an exact replacement holiday? There could be a considerable difference!

    • Ian Bewers says:

      It’s for the amount you’ve paid. If your re-booking is for more you pay the diff, & if it is less they give you a refund (not sure if that is cash or voucher credit against another booking.

  2. Graeme A says:

    Phoned and got through to the Gold Line within 5mins and they put me through to the holiday department. Spoke to a lovely gentleman who got my £3,000 April holiday to Abu Dhabi refunded. He said it may take 10 business days for the money to appear on CC. Feeling relieved! Get in quick folks!

  3. Thanks for the warning Rob and HFP! Just called BA. Straight through and got a cash refund for my April flight and hotel booking to Helsinki, where both outbound and inbound flights have been cancelled. All done in 3 minutes.

  4. Spoke with BA Holidays earlier. Seems they will refund any holidays with flights leaving up to 16th April as per the FCO guidance (30 days from 17th March), or if the flight has been explicitly cancelled.
    My Flight is on 18th April, so miss out on the refund currently. So there is no point calling if your flight is after the 16th April.

    • Yukon2 says:

      Thanks for the heads up! Wouldn’t have wanted to spend 30mins on the phone just to be told that.

    • Lady London says:

      FCO guidance likely to be extended I would say. I suggest you hold on

    • In the same boat, without paddles, DJ.

      And had an email earlier from BA Holidays looking forward to seeing me on the flight to Corfu on the 18th (week long holiday) – obviously without BoB and no special diet meals.

      Hotel shut, like all of the Greek hotels. Plus 14 day quarantine for all arrivals.

      Think I might just turn up at Heathrow for the hell of it, see how they intend to deal with me being refused entry on landing LOL

  5. stevenhp1987 says:

    The Sheraton Michigan Avenue in Chicago emailed us to say they they are closed until further notice and cancelled our booking. We had gotten them to add my wife’s Marriott number to the booking!

    It was part of a BA Holiday.

    Logged into MMB to see it thinks the hotel is fine, but, the outbound is finally cancelled.

    Was an AA codeshare. AA showing as they’ve rebooked it as a connection via DFW…

    Was going to wait for an automatic refund, or an email from BA with my options, but this article made me ring up and request it sooner.

    Took about 30mins to get through but they said they’ve cancelled it. Still shows in MMB though (with higher Avios and Tier Points… And £0 total).

  6. I have a similar situation with a package booking made through Netflights. Flights are with Emirates departing in a couple weeks. Netflights have cancelled all packages in March and April but are only offering credit vouchers that have to used by sep 2020 for travel up to mid 2021. I would prefer a refund so will need to contact my insurer nationwide or do a section 75, but that might be tricky because I paid on my Tandem credit card which was cancelled a couple of weeks go ( I decided not to continue with their subscription model)…..really annoyed by Netflights though!

    • NigelthePensioner says:

      Your Tandem will still accept refunds on to it. Just not purchases. You then ring them and after security, they will transfer to a bank account in your name.

  7. We have some time I know, but we have a BA Holiday booked for 20th May, with final balance due on 15th April…would you pay the balance with the real chance of a voucher being issued, or would you just cancel and forfeit the £500 deposit and get the refund of the 25% you have already paid towards the final bill? Or just hold fire…?

    • WaynedP says:

      My reading of the T&Cs and the FAQs on BA website is that you are eligible to receive a voucher for the full amount of the deposit paid, even if you choose to cancel now, because your flight departs on or before 31 May. The voucher is valid for 12 months from the date of your original departure.

  8. What are these vouchers like – can they be used on any route or is it for the specific flight cancelled?

  9. Easyjet have removed the option to refund flights that they’ve cancelled… Flight was only 3 days away, do I have any recourse?

  10. Frenske says:

    I received an email that’ll get a full refund for cancelled flight+car rental.
    Vouchers may be worthless for us, there is a real chance that we’ll lose our jobs soon.

  11. I received an email from BA last Tuesday saying that my holiday to Dubai (departing 11 April) was cancelled and that i would receive a refund in full within 7 day – the refund (around 6k) was therefore expected to land on my card by today, but not yet showing on the balance.

    Would I expect to still receive this refund – or should I be chasing BA (don’t want to hassle the call centres unnecessarily) / insurance route?

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