In a case that may have far reaching implications for the holiday market, the trial of Travel Republic and director Kane Pirie for breaching ATOL regulations began at Stratford Magistrates Court this week.

The ATOL scheme provides protection to consumers when they purchase a package holiday but prosecuting Counsel Ian Croxford suggested that Travel Republic had got round the need for them by encouraging consumers to book combinations of holiday elements – such as hotels, flights and transport – with separate confirmation booking forms in order to “unbundle” the purchase.

Croxford said that by trading in this way Travel Republic secured a commercial advantage at the cost of “a serious detriment” to consumers. He added that Travel Republic had “elected to trade in a manner it did,” even though they had been aware since September 2007 that they were selling holidays in breach of CAA regulations.

Over 30 Travel Republic customers are expected to be heard over the course of the trial, many of whom fell victim to the collapse of airline XL in September last year. One such client, Laura Edwards, told the court “I understood it as a package holiday. You booked [the elements] one at a time and that equated to a package holiday.”

Croxford continued that, “it [Travel Republic] enters into contracts with suppliers, and offers a broad selection of options from what is, in effect, an electronic Brochure. Travel Republic was clearly selling packages.”

Hugo Keith QC, acting for the defence, argued that many of the witnesses statements were highly contentious and put it to CAA ATOL enforcement team supervisor Mark Hydes that the CAA’s approach to prosecute some retailers and not others was “a highly muddled approach.”

The case, which is expected to last three weeks, is likely to have ramifications not only for the package holiday market but the Civil Aviation Authority’s (CAA) ability to regulate it.