The industry welcomed the announcement that a £1 ATOL protection charge on packages will replace ATOL bonding from April 1, but remains concerned about the details.
Under-secretary of state for transport Jim Fitzpatrick revealed the Government’s intention “in principle” to make the switch in a letter to the Civil Aviation Authority this week. The decision should be confirmed in the autumn.
Federation of Tour Operators director-general Andy Cooper said: “The timetable is challenging. We need the changes in place for the September ATOL renewals.”
Tour operators will be keen to be released from bonds as soon as the APC is introduced, otherwise they risk paying twice for consumer protection.
“The question is how long the September renewals need to be valid,” Cooper added. “We need the detail in two weeks.”
The CAA said companies would be released from bonding requirements from the start, subject to agreement with bonding providers.
Cooper also raised concern about the impact of a company failure before the APC has raised sufficient funds to cope. Co-operative Travel Trading Group chief operating officer Mike Greenacre agreed: “We question whether £1 will be sufficient to replenish the Air Travel Trust fund quickly enough.”
A spokesman for the CAA’s consumer protection group said: “We will be talking to insurance providers to put cover in place to provide adequate liquidity in the event of a major failure.” He confirmed the air travel trust fund would pay for that insurance.
However, the April 1 start date could slip if the CAA fails to secure satisfactory insurance arrangements.