On the Beach is calling for cash refunds to be given to consumers holding refund credit notes (RCNs) for their Covid-19-cancelled holiday.
The tour operator argued an extension will only prolong the issues with RCNs.
It wants the CAA to take clear steps now to reassure customers that they can book holidays with confidence in the future and that lessons from 2020/21 have been learned.
It comes as the CAA announced it is in talks with the government to extend the deadline for issuing RCNs beyond March 31st and extending the expiry date for new RCNs beyond September 30th.
With a return to travel now looking likely to be delayed, it appears the government may grant approval for an extension of the system.
Simon Cooper, chief executive of On the Beach said: “Extending the refund credit note deadline only kicks the can down the road.
“From travel companies increasing their prices to rebook the same holiday and leaving consumers with no option to shop around, to lack of clarity on the terms and conditions, and the likelihood of some people forgetting to redeem them altogether - these vouchers are not in the best interests of consumers.”
On the Beach has been vocal in reiterating consumer rights to receive cash refunds rather than credit notes during the pandemic.
The company keeps all customer hotel and transfer monies in a separate regulated trust account, which cannot be accessed until after the customer has travelled, meaning cash is refunded quickly when a holiday is cancelled.
Cooper added: “It’s not fair that consumers have their money locked up in these vouchers.
“Travel companies are using the money their customers have paid for future holidays as cash flow.
“Should any of these companies enter financial difficulty, it would take many months and administrative burden for consumers to get their money back from ATOL.”