The British company Opodo, bought by ‘Europe’s biggest online travel agent’ eDreams in 2011, has left the Atol scheme.
It says it has moved its base to Spain, where its sister company eDreams has its headquarters.
All companies that sell package holidays with flights to UK customers are obliged to offer financial protection, but those based in Europe have to use a scheme based in their home country. They are not allowed to use Atol.
The Civil Aviation Authority (CAA) has warned that the cover offered by European schemes may not be the same as consumers would expect in the UK.
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Which? Travel reported earlier this summer that Opodo was selling exactly the same holidays as eDreams – but at that point those provided by Opodo were Atol protected, while eDreams weren’t.
Atol protection more crucial than ever
The Atol scheme protects holidaymakers in the event of travel companies going into liquidation. If you have an Atol certificate you’ll get your money back if the firm fails before the holiday takes place, and you’ll be repatriated by the Civil Aviation Authority (CAA) if the firm fails while you’re abroad.
Financial protection is more important than ever in the current climate. According to the CAA, 176 travel companies did not renew their Atol licence this autumn. While some simply have no plans to sell package holidays in the next six months, many have gone bust – including STA Travel and other big names.
Until recently, for every holiday Opodo sold to UK-based customers, it paid £2.50pp into the Atol scheme. In the Spanish scheme that it now belongs to the rules say that the minimum amount that the financial guarantee must cover is, ‘5% of the invoice for package travel of the previous year (minimum €100,000)’. The European Consumers association BEUC told us: ‘This is likely to be insufficient in the COVID-19 situation.’
Information on how much European travel companies actually pay is not available to the public, but Opodo has told us that it pays 18% rather than the 5% minimum.
Holidaymakers stranded abroad or left out of pocket?
The CAA has also warned that it may not repatriate customers who book holidays with companies that don’t have Atol protection. It said:
‘If your travel firm collapses while you are on holiday, you may need to make your own arrangements to get home and then claim these back from the protection authority. If your return flights cost more than the price you originally paid, you are unlikely to be able to reclaim the difference.’
Opodo assured us that its cover does include the cost of repatriation for holidaymakers in the event of its insolvency.
Atol protection after Brexit
Opodo will not remain outside the Atol scheme for much longer. When the Brexit transition period ends at the end of this year, European companies will need to sign up to Atol. The CAA has said that it will not necessarily enforce this immediately on 1 January if companies have demonstrated that they are in the process of applying for a licence.
The change will affect many other companies, including Ireland-based Ryanair, which will need to provide Atol protection when customers book hotels, car hire, tours or certain other extras alongside their flights.
Which? Travel advises consumers not to book package holidays with companies unless they have Atol. Although some may be within European schemes that also offer a reasonable level of protection, there is no way for consumers to verify whether that is the case.
Opodo worst flight booking website
Lack of Atol protection for package holidays is not the only reason you shouldn’t book with Opodo. It also sells flight-only bookings. Opodo was the lowest-rated firm in our most recent annual survey of flight booking sites. Customers have also reported long waits to receive refunds for flights cancelled during the pandemic.
Flight-only bookings are usually not Atol protected. It is possible for travel agents to choose to pay in to the Atol scheme for flights, (Trailfinders have told us that they do) but most agents do not.
The simplest way for customers to protect their money is to book directly with the airline using a credit card. Whether you book through an agent or direct, it is the airline that has the legal responsibility to provide the refund.
Opodo told us: ‘All package holiday bookings made with Opodo and eDreams are protected by the Spanish financial protection scheme.
‘This scheme is fully compliant with the standards of protection required by EU legislation and offers the same level of protection as ATOL, allowing UK travel package customers to book their holidays with the highest level of protection.
‘The cover provided by Opodo not only complies with the level of protection required by the Package Travel Directive, but it goes beyond the minimum level required by law.
‘We are in close contact with the CAA and plan to reapply for an ATOL licence for when the Brexit transition period ends. We are in the process of preparing this application and plan to be ATOL protected in January 2021, assuming CAA approval.’