Crunch time for ABTA

IN A week in which ABTA demanded Government action on consumer protection and held crunch internal talks on its role, the trade has raised serious doubts about the association’s future.

Following fears last week’s quashing of Civil Aviation Authority ATOL guidance will result in less consumer protection, ABTA president Martin Wellings has given the clearest indication yet Newman Street intends to ditch its bonding role.

And with operators unhappy about ABTA’s part in last week’s judicial review and now threatening to quit the association, a board meeting on Wednesday was expected to scrap bonding regulations for ABTA’s operator members. ABTA confirmed a significant announcement would be made on Monday or Tuesday.

At this week’s ABTA annual dinner in the Houses of Parliament, Wellings blamed loopholes in current regulations – caused by a “disjointed” and “confusing” approach by Government – on airlines being able to avoid bonding.

He warned this will lead to operators re-organising their businesses to bypass ATOL requirements. “It may be regrettable, but who can blame them?” he added.

Addressing Government and opposition politicians – with the exception of tourism minister James Purnell, who could not attend for personal reasons – Wellings admitted if the Government does act to sort out consumer protection it could leave ABTA with a “reduced role”.

ABTA would retain fundamental responsibilities for developing skills and standards for members, he said.

However, the Association of Independent Tour Operators has questioned whether ABTA can continue representing operators’ and agents’ interests.

Sunvil managing director and AITO council member Noel Josephides said: “I am not interested in everyone piling into the same association.”

Claiming AITO could be a viable alternative, offering the same protections and opportunities, he added: “Do I want to belong to an association that is meaningless to me? We are 100% protected by our own licence and will negotiate a bond for anyone who wants to join.”

The comments come in the week the Civil Aviation Authority released figures showing the number of ATOL-protected holidays available in the year to September 2005 fell by 700,000, or 2.6%, to 27.3 million.

Meanwhile, On Holiday Group chief executive Steve Endacott said last week’s judicial review judgement opened the floodgates for rogue traders and will undermine the association.

“The customer believes an ABTA sign means their money is protected. What does ABTA stand for? A growing percentage of bookings through ABTA agents won’t be bonded.”

Endacott called on ABTA to introduce a £2 levy to protect holidays not covered by traditional bonding schemes and warned it not to ditch consumer protection. “ABTA would be chucking away its greatest consumer franchise if it got rid of bonding,” he said.

Agents have also been warned by Travel Trust Association director Todd Carpenter that they are risking everything by not having an ATOL.

“It’s like an inverse lottery. Of all the millions of holidaymakers one is going to test this ruling and it could be you who ends up in court. All ABTA won last week was the coin toss, the game has still to be played and the Government sets the rules.”

In this week’s speech Wellings warned that by 2009 only a third of travellers would be protected against financial failure, down from 98% a decade ago. He said the problem would have been solved if the Government had not rejected a £1 levy on flights last year.

“Why spend millions of pounds protecting customers when the no-frills airlines are winning so much business and not spending a penny on protection?” he asked.

Wellings added it was important ABTA represented all of the industry as the line between operators and agents becomes blurred. “If ABTA does not represent both, it means lobbying and other activities are more difficult,” he said.

Kuoni managing director Sue Biggs added: “There’s still a huge benefit being an ABTA member as there is recognition among consumers and ATOLs are widely recognised. The vast majority of customers still want to know their security is being maintained.”