Holiday prices blow to families

MILLIONS of Britons face paying more for their package holidays. Travel companies want customers to make up for the impact on their profits of the September 11 atrocities.

They are seeking a change in the law to allow them to impose extra costs of £15 a head, or £60 for a family of four. And there are claims that the figure could eventually be far higher.

The industry says it faces a massive drop in overseas travel from the UK next year due to the state of the economy and a lack of confidence in flying following the US outrage.

So the Association of British Travel Agents wants the Government to relax strict rules which currently limit surcharges - extra payments by holidaymakers intended to compensate-travel firms for exceptional circumstances. This would allow companies to pass on more of their extra costs, such as having to pay for increased security and higher insurance premiums.

But the Consumers' Association says the move is 'a con' and the figure of £15 could be 'just the start'. Its principal policy adviser Phil Evans said: 'The charges are bound to creep up.' The Department of Trade and Industry has a simple choice, he said. 'They can side with the holidaymakers or with an industry that does not want to be honest about its prices.'

And there were suggestions that the industry's prospects are by no means as gloomy as suggested. In a survey for the Travel Trade Gazette 59% of agents said they had seen customers increase. Some of the major firms have been making substantial profits. First Choice made about £90m in the financial year up to this autumn, while Airtours profits last year were around £100m.

Under the present rules, operators are forbidden to impose surcharges within 30 days of a holidaymaker's departure and until they themselves have absorbed any extra costs equivalent to 2% of the cost of the holiday. ABTA wants to see surcharges allowed up to 20 days before departure, and the 2% rule scrapped.

It said on Monday that any change would not affect existing bookings. The events of 11 September had made such a change 'unavoidable', and it would aid the survival of 'the many small, specialist family businesses', it added.

Aircraft and passenger insurance charges have risen five-fold since the hijackings. British Airways has already announced a £2.50 surcharge to cover its extra costs. Over a full year it will generate nearly £ 100m. BA says more than 120 carriers worldwide have introduced similar increases. Among British-based operators, these include only Go (£2.50) and Ryanair (£1.80).

It is predicted that more than 3,000 jobs will disappear as the big four tour operating groups respond to the current downturn. Last week Thomas Cook said it would axe 1,500 jobs in the UK and impose pay cuts of up to 10% on more than three-quarters of its remaining workforce of 11,000.

But none of this has impressed the Consumers' Association, which said: 'It's a ridiculous situation where they are essentially saying that they can't put up prices in the brochure so they slap extra charges on people who have already booked instead. It is a dishonest means of keeping prices artificially low. They are counting on the fact that holidaymakers will not cancel a holiday just before they are about to go because of a surcharge.'

A DTI spokesman said: 'We will will balance the interests of the consumer alongside the interests of business.'