The Civil Aviation Authority has been criticised for asking tour operators to allow their financial and licence records to be passed to the insurer of the new Air Travel Trust, set to be introduced next month.
Insurer AIG is to provide £300 million worth of cover for the trust and, as part of the deal, has requested that it can discuss with the CAA the finances and businesses of the larger licence holders.
The CAA is also required to inform AIG of significant events that could have adverse effects on any of the members’ businesses.
However, White Hart Associates partner Chris Photi said this would give AIG too much influence and could lead to the insurer demanding tour operators revert to more costly traditional bonding. This is because AIG is concerned about possible losses. These bonds may be difficult to obtain in the market, he said.
Photi added: “Clients used to be able to select their own bond insurer but now the CAA has done it for them and they don’t get the chance to talk to them.”
However, a CAA spokesman said: “Insurers need to know what they are insuring. The majority of ATOL holders involved have no difficulty with this.”
Sunvil Holidays managing director Noel Josephides supported the move as it will increase financial transparency and should end such practices as hoteliers extending credit to operators if they are having difficulties.
“We have always been underwritten by a bond obligor and I see no difference between another bond obligor and AIG,” he said.
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