The price of protecting flight-inclusive holidays could rise from £2.50 to more than £10 as a result of Thomas Cook’s failure, a leading Atol expert has warned.
Alan Bowen said the CAA’s Air Travel Trust Fund had to be replenished after the collapse of the UK’s third-biggest Atol-holder.
CAA chair Dame Deirdre Hutton has previously estimated the cost of repatriation and refunds for Thomas Cook customers at £480 million.
She said this would “clean out the trust” but had “no intention” of raising the £2.50 Atol Protection Contribution (APC).
But Bowen, legal advisor to the Association of Atol Companies, said APC could rise to “£5 or £10 or more” after 2020.
Addressing members of the Elite Travel Group last week, he said taxpayers paid £40 million to repatriate holidaymakers who were not covered by the Atol scheme.
“The system is great for consumers, but not for the rest of us,” Bowen said. “Not a single [Thomas Cook customer] was asked for the Atol Certificate, so why pay £2.50?”
He said any reforms to airline insolvency would be delayed, with the general election and Brexit dominating the government’s agenda.
JTA Travel Group managing director Wayne Darrock, whose business lost £400,000 due to the Thomas Cook collapse, said: “The cupboard is bare; will it be replenished? Can we say we are fully protected?”
He called for clarity around the “unregulated mess” of protection, and warned of rising costs from insurance companies and credit card firms.
“The consumer is protected, but we need to protect the industry,” Darrock said.
Elite general manager John Escott said members had not been badly hit because they had been selling fewer Thomas Cook holidays over the past year, but added: “We face a perfect storm: a Brexit date in the peaks and a general election. But the high-end market is still booking.”
Simon Bunce, director of legal affairs at Abta, said future agency agreements were likely to change with regards to balance payments, credit terms and access to customer contact details.
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