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Insolvency Protection – Experiences in Finland and the proposed new Package Travel Directive

Petteri Lehtonen

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Proposed new Package Travel Directive

Key points to the definition− Defined definition of the ”old” package

− Proposed ”assisted travel arrangement”

− Business travel

Key points to the Insolvency Protection− Effective and prompt refund of all payments and travelers repatriation

− The required insolvency protection should take into account: Actual financial risk of the activities of the organiser, including the type

of combination of travel services they sell; Foreseeable seasonal fluctuations and Extent of pre-payments and the way in which these are secured.

− Mutual recognition of insolvency protection and administrative cooperation (Internal Market Information System)

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Proposed new Package Travel Directive

The proposed definition is as wide as elephant´s behind?

It would be impossible to implement the proposed insolvency protection with individual guarantees (Finland, Sweden, Austria, and Hungary?)− This sort of a system needs clear definition;

− Most of the time slow refund of prepayments and

− 100 % refund is not sure.

Most members states that are using individual guarantees would need to rethink their systems− Most likely some sort of full fund or part fund part individual guarantees

A big improvement for travelers’.

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Case Air Finland

Air Finland was declared bankrupt 26th of June 2012 late at the evening.− This was the first bigger organiser bankruptcy that we didn´t have any

pre notice. We got the news at the same time as did the travelers’.

− Second biggest travel organiser bankruptcy in Finland.− Approx. 3 000 applications for refund.

We had just launched our new electronic form to claim refund. Claims were handled within 6 months from the bankruptcy (only

one handler). Refund are not paid before all the appeals have been dealt (this will

take years) The guarantee only covers approx. 70 % of the claims.

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Case Air Finland

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Case Air Finland

Over 1 000 travelers’ abroad that needed repatriation. Alanya (309 pax, 28th of June) Rhodes (205 pax, 28th of June) Chania (212 pax, 28th of June) Heraklion (162 pax, 28th of June) Malaga (83 pax, 28th of June) Alicante (40 pax, 28th of June) Hurghada (54 pax, 3rd of July)

3 of the biggest travel organiser cooperated by arranging the ground transportation at the destinations (dozens of busses).

Most of the travelers’ were home two days after the bankruptcy.

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Thank you