Thomas Cook: Thousands of DIY travellers to profit from collapse by avoiding Atol cover

Exclusive: Loophole in consumer law allows independent holidaymakers to claim despite taking a free taxpayer-funded flight

Thousands of travellers flown back to the UK at the taxpayers’ expense stand to make a profit from the collapse of Thomas Cook – so long as they avoided Atol protection.

Once home, these passengers can claim a full refund for the cost of their original Thomas Cook flight from their credit card firm.

But package holidaymakers, who thought they were doing the right thing and paid a £2.50 contribution to the Air Travel Organiser’s Licence (Atol) scheme, will get nothing.

The bizarre situation arises from the government’s provision of free flights for all passengers affected by the UK’s biggest-ever travel firm collapse.

“Rescue” flights organised by the Civil Aviation Authority (CAA) and code-named Operation Matterhorn are open to anyone with a Thomas Cook flight between 23 September and 6 October – including passengers who bought a Thomas Cook flight for the inbound leg to the UK.

The CAA has long urged the travelling public to book Atol-protected holidays. But following both the 2017 collapse of Monarch and the 2019 failure of Thomas Cook, the government took the decision of repatriating all affected passengers regardless of their Atol status.

DIY holidaymakers who were flown home on a repatriation flight can claim for their original departure under Section 75 of the Consumer Credit Act. The law makes card providers jointly liable with the supplier for the provision of the service – in this case a one-way flight to the UK.

The act applies to purchases of £100 or more. While some solo travellers will have paid less than this, and will not be able to claim, a couple who paid £50 each in a single transaction would be able to seek a refund.

To claim the cost of their original flight back, seat-only passengers need only demonstrate that their flight was grounded – a trivial matter since Thomas Cook Airlines’ UK operations ceased on 23 September. The fact that they were flown home at or close to the planned time is irrelevant.

For some one-way transatlantic flights, passengers could make several hundred pounds.

It is possible that passengers who paid with a debit card, or whose flight cost less than £100, would be able to claim under the banks’ voluntary “chargeback” scheme.

A package holidaymaker with Atol protection cannot claim for the cancelled flight because they bought a package that was provided in line with the original promise.

Speaking exclusively to The Independent during a repatriation flight on Tuesday, the Civil Aviation Authority chair, Dame Deirdre Hutton, explained the “open to all” policy like this: “It’s a matter of practicality. How could we expect people in small airports around the world to distinguish between Atol and non-Atol passengers?”

Derek Moore, chair of the Association of Independent Tour Operators, said: “This is yet another unintended consequence of the Thomas Cook collapse.

“It is an own goal for the government that non-Atol protected consumers have been flown home at taxpayers’ expense.

“Why should any tour operator pay thousands of pounds in hard cash for an Atol – not to mention leaping through a huge range of time-consuming and costly hoops – when non-Atol companies’ clients were repatriated at no cost to consumer or company?

“There is a simply massive hole in our current lousy legislation, and no one in government has yet had the guts to tackle it.”

A spokesperson for UK Finance, the banks’ trade association, rejected the possibility that passengers would be able to claim for Thomas Cook flights, saying: “Non-ATOL protected customers who have been repatriated under the government/CAA scheme will not be able to claim a full refund on their original flight tickets under Section 75 of the Consumer Credit Act as they would have received a return flight.”

Operation Matterhorn will finish on Sunday 6 October, by which time almost all the Thomas Cook passengers who were abroad at the time of the collapse will be back in the UK.