Abta has defended its refund policy following the resignation of On the Beach, the UK’s largest online travel agent, in dispute over FCO guidelines.

An Abta statement said it understands the ‘enormous pressure’ its members are under – but insists consumer confidence in package holidays is of the upmost importance.

The separation comes a month after On the Beach said it disagreed with the decision of the Abta Board that holidaymakers are entitled to a full refund when the Foreign Commonwealth and Development Office (FCDO) advices against all-but-essential travel.

On the Beach’s stance has been that it would offer refunds on accommodation and transfers to customers who choose to cancel based on FCDO advice, but will only refund the flight element if the airline cancels and refunds On the Beach.

In a statement explaining its decision to leave ABTA, On the Beach insisted its packaged holidays were still protected, through ATOL and its ‘ring-fenced trust account’.

It said: “The travel industry is facing unprecedented challenges, and changes are inevitable as businesses and trade organisations adapt.

“On the Beach has been an ABTA member since 2004, however the current circumstances have presented difficult decisions, and different legal interpretations on complex matters.

“As of late last week, On the Beach and Sunshine.co.uk have informed ABTA that they will resign their memberships. On the Beach and Sunshine.co.uk package holidays continue to be financially protected by the ATOL scheme and our ring-fenced trust account.”