AITO has hit out at the government following the demise of XL Holidays for failing to bring airlines under ATOL regulations.

AITO chairman Derek Moore said the association had long warned of the consequences of allowing a two-tier industry to exist, in which consumers who book holidays independently are unprotected if a travel company goes into receivership.

“It’s a ghastly mess all round and needn’t have been so if the government followed the travel industry’s recommendations – including those of its own select committee on transport – to insist that airlines were also brought within the remit of the ATOL regulations. That would have meant fair play all round for consumers and for holiday companies,” said Moore.

He confirmed AITO will lobby government again to bring airlines under the ATOL remit.

“Two airlines – Zoom and XL – going bust in the space of two weeks ought, we think, be enough to make the government reconsider the situation. Airlines can’t continue to claim that they are impervious to potential collapse with fuel prices being so high and with exchange rates so volatile.”