Collective Commentary about the New Package Travel Directive

ARTICLE 17 | PATRICIA BENAVIDES VELASCO 399 recent business data of the organiser, such as the turnover of the previous year. However, the organiser will have to adapt such a protection in the cases in which the eventual risks to be faced rise, as it may happen when a substantial increase on the sales of travel packages takes place. However, the organiser will have to adapt this guarantee to the circumstances of its activity. On the other hand, he is not supposed to consider extremely remote risks, as this would be disproportionate and the security would be higher than the cost of the intended protection. Despite the fact that the Directive uses a formula where it requests the insurance to amount to a certain percentage of the business turnover and where internal regulations are the ones which determine the proper amount to satisfy the terms, this criterion is not without its issues. This problem has already been considered by the Court of Justice of the European Union, Chamber Six, in case Baradics 40 , responding to a preliminary ruling on the requested amount of the security provided by the organisers of travel packages. The ruling states that a national rule only adapts the internal regulation to the obligations regarding the guarantee in insolvency situations when, independently on the means used, the restitution of all the paid amounts and, when relevant, the repatriation, are effectively guaranteed to the traveller, considering the lack of any indication in the European Directive to limit the considered guarantee. This was the case considered in that ruling. The plaintiffs facing a situation of insolvency of the organiser of the travel package could only recover a certain percentage of the payments made for the travel. The lack of a full compensation was a consequence of the provision under Hungarian Law of a certain method to determine the amount of the security. Nevertheless, the value of the security should correspond to a certain percentage of the net turnover foreseen regarding the commercialization of the travel package or reach a certain minimum amount. This percentage or minimum amount depended on whether the fares that formed the travel package and the value of the commitments covered by the guarantee exceeded twenty-five per cent of the company’s turnover. The insurance contract concluded by the organiser had fixed a maximum amount of coverage that was not enough to face the restitution of all the payments made by the travellers. 40 Order of the Court, sixth Chamber, in Case C-430/13 Baradics and others, of 16 January 2014, ECLI:EU:C:2014:32.