The ITAA met with the Joint Oireachtas Committee on Transport and Communications Networks today and its opening statement laid out in stark terms the unprecedented difficulties currently being faced by the travel industry. Led by ITAA CEO Pat Dawson and Paul Hackett of Click & Go, the delegation’s opening statement outlined all of the issues that have left the industry effectively unable to trade and how current financial supports don’t go far enough to alleviate a crisis that shows little sign of getting better in the immediate future.
Addressing the committee, Paul Hackett said, “if NPHET and the Government want to close down international travel for a year they need to put in place the appropriate level of supports if they want to have an Irish travel industry when international travel can safely resume.”
“We are a unique sector; we have had to remain open to clients to facilitate refunds with practically zero income for almost two years. The travel sector needs a bespoke response, a specific support as a consequence of being closed on public health grounds linked to international travel.” – Paul Hackett
The statement also outlined the issues with the current levels of support, including the Employment Wage Subsidy Scheme (EWSS). The scheme is available to all businesses whose turnover is down at least 30 per cent, the statement read, but for the travel sector, the fall off in trade is closer to 90 per cent for 2021 and potentially up to 100 per cent. “The maximum EWSS payment in a full year is €18,200,” Mr Hackett said. “Whilst not for one minute being ungrateful about the wage subsidy, how many people do you know earn €18,200 in a full year? There is no visibility on wage supports after 31st March.”
The statement also took issue with the limitations of the COVID Restriction Support Scheme (CRSS), which only applies at Levels 4 and 5 of lockdown, and is not a grant but an advanced tax credit. Arguing that while on the surface a maximum threshold of €5,000 per week might seem reasonable for a business whose annual turnover is less than €4 million, the CRSS doesn’t cover non-payroll costs “to any material extent” for companies who trade above that level. ” This is a retail-focussed assistance and does not cover all Irish licensed travel companies,” it read.
“CRSS doesn’t support a downturn in business and is directly linked to the levels in the COVID framework but clearly travel agents are prevented from trading, irrespective of the levels and have been since March 2020.”
The statement also called for a reform of the Refund Credit Note (RCN) scheme more in line with that adopted in countries like Denmark, the Netherlands, Portugal and Bulgaria. They made the argument that it was “introduced with a 9‐month delay on the assumption that the industry would be back trading. Clearly this is not the case.”
In their statement, the delegation explained that “a significant number of refunds to customers for cancelled flights are outstanding” and asked for greater government assistance in tackling the problem of “one particular airline” and its refusal to engage with the travel trade over refunds. It also asked for greater clarity in dealing with the problem of so-called ‘ghost flights,’ when airlines operate flights contrary to government advice. Finally, the statement questioned the dithering over the introduction of pre-departure airport testing and the efficacy of the vaccine rollout, saying it “does appear that we are lagging well behind [other countries] in getting the vaccine into the arms of our citizens.”
In the follow-up Q&A session, Paul Hackett replied to a question by committee member Duncan Smith (LAB) saying, “We made submissions last year to every committee…but we were ignored. If we don’t support this industry there won’t be an industry. It’ll be managed out of the UK.”
After the session, ITTN’s managing director Sharon Jordan spoke to Paul Hackett in an exclusive interview.
