CAA reports price rise

THE reduction of charter capacity in 2005 led to a dramatic increase in the price of package holidays, according to the Civil Aviation Authority.

It reports the number of ATOL-protected holidays available in the 12 months to the end of September 2005 fell by 700,000 – or 2.6% – to 27.3 million.

Yet the revenue from sales increased by £500 million on the previous 12 months to £14 billion, with the average price rising 6.8% to £514 – an increase of £33.

The average summer price rose by 5.3% or £25 to £494 per person, and the average winter price by 8.9% or £45 to £547.

Most of the major tour operators cut capacity last year, but MyTravel slashed its share of ATOL-protected packages by 27%, significantly affecting the overall market.

CAA Consumer Protection Group deputy director David Moesli said: “The average sale price is increasing as supply and demand have been better matched. The good news is that customers seem prepared to pay the increased price and the discounts are not significant.”

However, the CAA’s annual report also highlights the increasing number of people who are travelling abroad without ATOL cover.

The numbers taking ATOL-protected air packages or charter flights fell by 3% between April and September 2005.

Yet the total number of leisure air travel passengers rose by 8% in the same period, according to figures from the Office of National Statistics.

CAA Consumer Protection Group director Richard Jackson expressed concern that many customers believe their holiday is protected when it is not.

He said: “Consumers should be aware of the potential risks so they can consider whether to take financial protection measures, such as travel insurance that covers against insolvency.”