THE industry has broadly welcomed Civil Aviation Authority proposals for a £1 Consumer Protection Charge to replace ATOL bonds in documents released following a three-month consultation.
But the news will do little to end uncertainty about the future scope and costs of consumer protection.
The proposed scheme could vary widely depending on a Court of Appeal ruling on the dispute between ABTA and the CAA about whether agents selling dynamic packages require ATOL cover.
If the CAA wins it will expect agents who combine a flight with accommodation to be covered by an ATOL.
Yet whatever the outcome, one or more major tour operators could pull out of ATOL bonding. That would upset funding for the proposals, which the CAA hopes to base on collecting £1 for each of the 28 million ATOL-protected holidays sold each year.
“The crucial thing is the court decision,” said CAA consumer protection group deputy director David Moesli. “The figures could stay as they are, reduce or increase significantly.”
The proposals will be passed to the Department for Transport, with hopes that the £1 charge on package bookings could be in place by September 2007.
Moesli said the four main trade associations and 80% of small businesses which responded were in favour.
Tour operators appear unanimous in wanting bonding scrapped from the moment a charge is introduced.
But the industry may not win a Government guarantee to underwrite the fund. Borrowed funds or insurance protection could be used instead to underwrite protection.
Moesli agreed some of the cash raised would be used to pay off the £15.5 million debt of the Air Travel Trust Fund, which underwrites the ATOL scheme. And he conceded the £1 charge would do nothing to address the lack of consumer protection on sales outside ATOL cover.
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