CAA steers consumers onto a vigilant course

CAA steers consumers onto a vigilant course

THERECENT news of the collapse of consolidator Hamilton Travel sent shockwaves through the industry (Travel Weekly August 21).

It also highlighted how important it is for consumers to make sure they make a travel booking with a company that is bonded with the Civil Aviation Authority.

Because Hamilton Travel had an Air Travel Organiser’s Licence, issued through the CAA, all consumers who have booked flights will be protected.

However, there has been some concern in recent years that the public is not aware of the importance of booking through a company that is ATOL protected. This concern has led to a number of initiatives.

In January last year, the CAAformed a division, called the Consumer Protection Group, to look at ways in which possible loopholes in the ATOLsystem could be addressed.

Eighteen months on, there are a number of new changes afoot.

The CAA hasreplaced its Air Travel Trust Committee with a new group, called the Air Travel Insolvency Protection Advisory Committee.

It has representatives from all walks of life, including trade organisations, consumer and independent bodies.

In addition, the CAA will launch a drive to heighten the awareness of the ATOL system, and in particular the need for ATOL protection on the Web.

CAAConsumer Proctection Group deputy director David Moesli said: “We do have concerns about the Internet. Even though there were only 17 firms that had to call in their bonds this year, the lowest amount in the Air Travel Trust Fund’s history, the number of ATOLholders is on the increase.”

ATOLholders have more than tripled over the past eight years, rising from 603 holders in 1992 to 1,862 holders this year.

Moesli said: “The new chairman of ATIPAC, John Cox, is very concerned about the Internet and his views are echoed by others in the industry.

“Firstly you are never exactly sure who you are dealing with on the Web and who will cover you should anything happen.

“Secondly when an ATOLlicence is granted, a company must print this number on all its stationery, on its brochures and adverts. It must also appear on a Web site and there are concerns that Web sites can be altered very quickly.

“New Web businesses must be made aware of the regulations too,” said Moesli.

It is easy to see why a company would shy away from gaining an ATOL licence. It’s a costly and complicated business and the bonding requirements can tie-up capital which could be used for other purchases.

Moesli said: “We estimate the cost on average is 15p per passenger but it is a fairly expensive and slow process.

“Every year you have to apply to renew your licence, and once this has been approved, you have to apply for a grant. Both stages cost money. You then have to pay for each passenger you expect to carry per year.

“Also if you think you are going to take more passengers than originally planned, there is an extra fee to increase the cover of the bond.”

The CivilAviation Authority is taking new steps towards greater protection for consumers. Louise Longman reports

Taking flight:the association is implementing greater measures on booking flights via the Internet

Analysis

Moesli: has concerns over the Internet

ATOL facts and figures

What does an ATOLdo?

It exists to protect the public from losing its money or being stranded abroad because of the failure of air travel firms.

Who needs an ATOL?

Most travel firms are legally required to hold an ATOL licence to sell flights and holidays by air. The main exceptions are airlines and agents acting on behalf of ATOL-licensed firms, eg Travelcare does not need an ATOL because it acts as an agent for ATOLholders.

When was it introduced?

It started in 1972 and gives protection to 27 million people in the UKwho buy flights or air holidays each year.

What does it cost?

Renewals: £230 per year, plus a £460 renewal grant charge. In addition you must pay a passenger charge of 0.0995p. Firms must estimate how many passengers they aim to carry. If companies think they are going to carry more passengers than initially claimed, then they can vary the licence upwards. To raise the licence, firms must pay £44 to apply for the change and £51 for the grant of application, as well as an extra 0.0995p per passenger.

New licences: if you are a start-up company applying for an ATOLlicence, it is more expensive. Companies must pay a £655 application fee, plus a £655 grant fee, as well as a passenger charge of 0.0995p.