The Civil Aviation Authority has confirmed that members of the Travel Trust Association will not have to add the £1 ATOL-Protection Contribution (APC) to holiday sales when it is introduced next April.
CAA consumer protection group director Richard Jackson told the TTA conference in London last week: “TTA members will see no change in their provision of financial protection through TTA arrangements.”
The APC, often referred to as a £1 levy on ATOL-protected bookings, will replace the existing bonding requirements on tour operators from April 1.
Jackson said the new system would be sufficiently funded from the outset to deal with a major company failure. “We are looking to have access to funds totalling £350 million from day one,” he said.
“However, I would be deeply disappointed in our financial monitoring if there was a collapse worth that much.”
He conceded: “There could be external shocks, but I believe we can sustain a big failure.”
The existing financial protection system is more than £20 million in debt and only sustained by Government guarantee. The levy will have to settle this debt as well as provide funds to protect against future company failures.
But it is unlikely the levy will be withdrawn when sufficient sums have been raised. “There is a reluctance [in the Government] for the levy to go to zero,” said Jackson.
He denied the demands on travel businesses to provide financial information under the new system would be onerous. He said: “We are asking for basic business information.”
But Jackson also insisted the CAA would get tough on companies that fail to comply.
“There are players we will keep an eye on, that may say their legal advice tells them they do not need an ATOL. We will suggest they reconsider,” he said. “If they don’t, and we prosecute successfully, they will not work in the industry.”