ABTA could soon be allowed to issue ATOL licences
under Civil Aviation Authority plans to close the loophole that allows agents
to use split contracts.
The authority has proposed a scheme where small agents
bypass the CAA and have their financial position and management assessed by
Newman Street to obtain an ATOL licence.
The CAA wants all agents selling individual holiday
elements as a package under separate contracts to hold an ATOL licence but is
concerned at the bureaucracy of administering the extra 650 companies it
estimates are issuing dual contracts.
In the last year alone, 7,000 people were rescued and
13,000 refunded, at a cost of £3.7 million to the Air Travel Trust.
CAA director of consumer protection Helen Simpson
said: “It is important the public sees the ATOL symbol and knows they are
protected, it doesn’t matter who handles the administration.”
The CAA argued that, as most smaller travel agents
already hold licensing protection agreements and bonding arrangements with
trade bodies, it would be sensible to incorporate ATOL protection.
ABTA legal advisor Simon Bunce welcomed the proposal,
but said the issue of whether selling a flight and accommodation constitutes a
package under the Package Travel Regulations should be addressed.
He said: “It is a sensible way of doing it and should
reduce the amount of bureaucracy small agents face.”
ABTA is concerned about the increasing number of
agents offering split contract deals going bust and estimates the number of
recent failures has cost it more than £1 million.
The industry body called in
the police after it alleged two Blackpool agencies had been making split
contract packages but failing to secure accommodation (Travel Weekly August
26). The consultation is open until November 23, and the CAA is hoping to
introduce any new regulations by April 2003.