Collective Commentary about the New Package Travel Directive

ARTICLE 3 | MARC MC DONALD 157 was careful not to explicitly claim it was trying to protect organisers against the new competition by imposing the extra cost of insolvency protection on them. The closest it came in explaining its proposal to extend the insolvency obligation to facilitators of LTA’s is the following rather opaque statement: “Furthermore, with a view to ensuring a certain layer of additional, Union- -wide protection comparable to the one stemming from rules on passenger rights or general consumer acquis also for travellers buying more than one travel service through them, it is appropriate to provide that such retailers have to ensure that, in case of their own insolvency or the insolvency of any of the service providers, travellers will receive a refund of their pre-payment and, where relevant, will be repatriated.” 13 . It is not easy to understand exactly what this means. Perhaps it is even superficial, glossing over two important issues – are organisers and facilitators competitors in the same market, and – where is the evidence of facilitator insolvency risk which justifies imposing a security obligation on them. These points will be taken up again. To this writer the passage quoted above seems to be saying that because other transport providers have to take out insolvency protection for their passengers so too should facilitators of LTA’s. It is difficult to disagree with if it was true. As will be seen in the following part airlines are not subject to an insolvency obligation for seat-only travel. The Directive as finally enacted in 2015 addresses the concerns identified during the pre-legislative phase. It seeks to clarify the differences between packages and LTA’s and it forces the display of information notices by organisers and facilitators telling consumers which travel arrangements are protected and which aren’t. However, the extension of the security obligation to facilitators is the Directive’s major innovation and is not without difficulty. There is a question of whether there is sufficient evidence of consumer loss arising from insolvent LTA-facilitators to justify the extension. There is also a question whether a market analysis of what each does shows they compete across such a wide range of holiday and trip markets that organisers and facilitators can properly be regarded by law as competing in the same markets. These issues will now be addressed. Evidence of LTA-consumer loss Neither the Explanatory Memorandum part of Commission’s Proposal for the new Directive, nor the Preambles to the initial and final drafts of the legislation, 13 EU Commission [2013], p 7.