Comment: XL aftermath demonstrates the value of ATOL protection

It is a sign of the seriousness of the deepening financial crisis that the biggest travel company collapse since the early 1990s was wiped off newspaper front pages within 24 hours.

XL Leisure Group staff and customers are, more than anything, victims of that crisis – and there will be more, with credit a forgotten word in banking for now.

Amid all the difficulty, the trade can afford itself a pat on the back.

First, with 85,000 or more clients abroad when XL collapsed, the Civil Aviation Authority and leading companies pulled off the biggest rescue operation the industry has ever seen.

When International Leisure Group went down in March 1991 it did so with three times as many forward bookings but not so many holidaymakers abroad as XL.

The CAA’s consumer protection group, with the help of Monarch Airlines, British Airways, TUI Travel, Thomas Cook, Virgin Atlantic, BMI and others replaced a 21-aircraft fleet and crews almost overnight and took care of the ground handling.

Second, the value of the ATOL consumer-protection system could hardly be better illustrated. All bar 10,000 of those abroad were able to complete their holidays and fly home broadly on time at no cost.

The CAA even repatriated those without ATOL cover – although they will have to pay. The overwhelming majority of clients with advance bookings can likewise expect a full refund because they bought through the trade.

The media coverage pretty much reflected this success, despite reporters scrabbling to find individual horror stories – for which industry leaders rightly put the blame on
the government. Ministers rejected all pleas to extend the £1 ATOL levy applied to package holidays to all fares.

Trade bodies, travel groups, operators and agents would be crazy, amid such uncertainty, not to emphasise the value of the ATOL for all its worth.

In the circumstances, calls to extend the system to scheduled carriers make good public relations. But surely it makes more sense to emphasise what differentiates travel trade holidays and flights for the price of a cup of tea rather than demand its removal.

More on the collapse of XL

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