A leading industry accountant has warned of more company failures this week ahead of the Atol-renewal deadline on October 25.
The CAA moved the deadline for Atol renewals from September 30 to October 25 in the wake of the Thomas Cook collapse, to give itself and the industry additional time to cope with the fallout.
Head of travel and leisure at financial advisory firm White Hart Associates, Chris Photi praised the CAA’s head of operations, Michael Budge, for the decision but said: “The future dictates there will be further pipeline money failures. That’s very, very sad, but businesses are going to fail on the back of Thomas Cook and I expect there to be failures this week.
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“Why is that? The CAA put back the renewal cycle for the Atol licence to the 25th of October because of the turmoil of Thomas Cook. Excellent idea as far as Michael Budge was concerned, he did that fairly early in the process.
“But there are going to be some problems with companies trying to renew then.”
Photi, who was speaking at Travel Weekly’s Future of Travel Selling event last week, said the CAA’s Air Travel Trust Fund, which was designed to take a £250m failure in 2008, was “not looking in good shape” with the cost of Cook’s failure “falling squarely” on the CAA.
He predicted the final total cost could exceed £480m.
The CAA had an insurance policy for £400m but Photi said it was unlikely the full amount would be paid out.
“Will the insurance (company) continue with the policy if it does gets used? Who knows, but it will be more expensive.”
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