The new £1 ATOL levy goes live tomorrow backed up by a £60 million credit facility from Barclays Bank.
The bank is providing a five-year revolving credit facility for the new ATOL Protection Contribution, which is a £1 levy added to protected holidays, largely replacing the current bonding scheme.
The Civil Aviation Authority has agreed to the deal with the bank following months of talks. The bank will cover pay outs in the event of company failures before the existing Air Travel Trust Fund has had time to build up enough funds.
The CAA has also arranged an insurance policy with companies including AIG to provide additional funds for a failure of any of the major travel companies.
Director of the CAA’s consumer protection group Richard Jackson said: “The introduction of the APC on April 1 is the culmination of the CAA’s ATOL reform project.
“We are grateful for the support and hard work of the Government, industry and financial institutions to bring APC and the necessary supporting infrastructure into place.
“The CAA now needs to bed in these arrangements with the industry, and make sure licence holders understand the new licence conditions and the arrangements for the payment of the APC that will apply from April 1.”
Key changes to ATOL arrangements include the release of bonds by most licence holders joining the scheme on April 1, as well as revised bond requirements and overtrading guarantees for new entrants. The CAA says it will also mean clearer information for customers purchasing financially protected holidays, minimum business system requirements for all licence holders to improve compliance, the appointment of a compliance manager by each licence holder, and a new online facility for ATOL holders to report booking figures and automated collection of payments.
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