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Richard Jackson, consumer protection group director, CAA
“We are aware a number of people will be going through this [consultation] for the third time. This is about more than the £1 levy.
“It’s about improving regulation, making it proportionate to risk and reducing the regulatory burden. The low failure rate among travel companies means bonding is a disproportionately high cost.
“The ATOL system has grown over 30 years without being brought up to date. There is the burden of costs in relation to low-cost carriers, and there is the cost of compliance both in terms of time and bonding.
“The Government wants to see the Air Travel Trust Fund overdraft paid, and it wants a general reduction in the cost of funding repatriation and refunds.
“The APC will be a compulsory payment and must be included in the price [of a holiday]. We can’t force companies to show it separately on invoices, but we can encourage them to do so. Companies could not advertise a £99 holiday with a £1 levy. That would be a £100 holiday.
“If a passenger cancelled a booking they would not get their APC back because the booking would have been insured from the moment they bought it.
“The assumptions in the financial model are conservative. We assume a first major failure leading to a call on the fund in 2012/13. However, if the big four UK travel groups come down to two, the chance of a default leading to a failure would be much lower, since both the companies would be in the FTSE 100.
“We have been given the figures by the trade – and assume they are robust enough to rely on.
“Paying £1 for this sort of protection is superb value for money. If the industry promoted consumer protection I would expect to see an increase in the number of ATOL-protected packages.”