Filter By:

IMCO Committee study on the Package Travel Directive

IMCO Committee study on the Package Travel Directive

14 November 2023: This week, the European Parliament’s Committee on Internal Market and Consumer Protection (IMCO) published a study on the Performance of the Package Travel Directive and broader consumer protection issues in the implementation of passenger rights produced by the Policy Department for Economic, Scientific and Quality of Life Policies. It will serve as a basis for the Committee's work once the final text has been adopted by Commission.

The study is based on quantitative and qualitative research methods, including interviews with consumer authorities, Alternative Dispute Resolution bodies and stakeholders in the tourism ecosystem (including OTAs and their respective associations). Ten Member States were selected to carry out the study: the Czech Republic, Finland, France, Germany, Greece, Italy, the Netherlands, Poland, Romania and Spain.

Main findings

1/ PTD Substantive Law

  • Update definitions (in particular, Package Travel Services and Linked Travel Arrangements) because it has been observed that consumers find it difficult to understand when they can rely on each type of protection.
  • Develop comprehensive pre-contractual information forms (including key information documents, visual aids and infographics).
  • Provide clear and user-friendly pre-contractual information.
  • Re-evaluate the full pre-payment business model and explore alternative payment structures, like reducing the amount of the pre-payment.
  • Rules on vouchers, since the evidence shows that there are still different approaches between countries.
  • Mandatory insurance schemes or public funds to prevent insolvency risks.

2/ PTD Enforcement

  • Enhance enforcement mechanisms at both national and regional levels.
  • Improve the effectiveness of private enforcement and collective redress mechanisms.
  • Enhance ADR mechanisms and consider mandatory and specialised ADR.
  • Co-ordination with the Air Passenger Rights Regulation.

The PTD allows consumers to cancel their package and receive a full refund “in the event of unavoidable and extraordinary circumstances”. Currently, this right does not exist in EU261. According to the study, this creates a disparity regarding the right to reimbursement depending on the service booked (package vs single air service).

If an unavoidable and extraordinary circumstance is to occur, under the PTD the consumer can cancel their package and the organiser of the package must reimburse the consumer. However, if the flight takes place, the airline is under no obligation to refund the airfare to the organiser.

The study mentions the example of the COVID-19 pandemic where airlines were flying to destinations, even if restrictions were in place in that area. In this instance, because the flight could technically go ahead, the package organiser will obtain no refund for the price of the flight, meaning they must take on the cost of that refund which has contributed to prices rising in the market.

The study provides examples of many instances in which package travel organisers are unable to receive refunds for flight tickets, whilst they must reimburse consumers under the PTD within 14 days and stresses that this puts significant cost pressure on package travel organisers and creates a financial risk for SME operators.

It also highlights that redress options are not robust enough to oblige the travel service providers to repay the advance payments (e.g., the airline) to the package travel organiser.

Industry experts (interviewed in the context of the study) have agreed that a solution to this issue is the alignment of the legal frameworks and financial protection requirements between package travel organisers and airlines. Such an alignment will have – according to representatives of OTAs – positive impacts on costs and, in turn, consumer prices.

The study suggests some possible improvements, including:

  • Aligning the definitions and terminology used in both the PTD and APR can promote clarity and consistency.
  • Develop clear guidelines and communication materials that outline the rights and obligations of travellers under both provisions.
  • Enhance co-operation and communication between the national authorities responsible for enforcing the PTD and EU261.

Please note that ERA was not part of the group of stakeholders interviewed by the authors of this study.