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Simon Bunce, head of legal services, ABTA

Simon Bunce, head of legal services, ABTA“Any levy would be on ATOL holders, not consumers – adding an extra competitive disadvantage for companies.

“A levy to replace bonding is preferable – and is preferred by the CAA. But the CAA is under pressure to replenish the Air Travel Trust Fund and, presumably, if it can’t find an acceptable way forward there will be a levy anyway. Simply replenishing the fund would mean a levy on top of existing bonding.

“All the talk is of a £1 levy, but there is no guarantee it won’t be more. The industry would probably be content with £1. But a lot of tour operators could obtain bonding cheaper than £1 per passenger.

“The contribution would be an overhead, so it is difficult to see how it could be shown outside of the basic price [of a holiday].

The CAA is keen to see the charge shown separately and says it has been assured by Trading Standards that it can be. We are not convinced.

“The consultation document says it is for the ATOL holder to decide whether the contribution is passed on to customers. What about refunds if a customer cancels a holiday? Is the tour operator responsible for refunding the APC? Would the contribution come back to the tour operator?

“The CAA says the money won’t be refundable because protection has been given. But under the Package Travel Regulations, a customer is entitled to a full refund of the cost of a holiday in the event of a cancellation.

“Companies could show the charge separately on invoices, but the legal requirement will be on the ATOL-holder to pay. Whichever way you look at it, the APC will be passed on to consumers – either shown as a separate charge or included in the overall price.

“What do you put in adverts? Should a £99 holiday with a £1 APC be advertised at £100?”