The Civil Aviation Authority will begin paying out claims next week following the collapse of XL Leisure Group amid fears some in the trade may lose out.
XL collapsed last month with up to 200,000 passengers booked and the CAA expects up to 80,000 claims.
The CAA has yet to clarify how many were ATOL-protected. But it is poised to reject some claims from agents – including all bookings through xl.com. At least one agent will learn next week that their claim has been refused.
CAA consumer protection group deputy director David Moesli confirmed: “There is no ATOL protection on the dot-com sales. Agents will be wasting their time submitting claims.”
Claims without adequate documentation – especially where the CAA requires proof an agent identified themselves as such to a client – may also be refused. Previous failures have seen the CAA refuse up to 3% of claims.
It is unclear how many agents re-booked clients on alternative holidays and have made claims. But ABTA head of financial services Mike Monk said: “We expect most claims to come from consumers.”
Up to one-third of forward bookings came through XL direct sales brand Travel City Direct. Agents who booked clients with XL seat-only operator Freedom Flights, which held an ATOL, will have no problem with refunds for seat-only sales. But if they sold holiday components with the flights they may not be covered.
The total payout could reach £60 million. Standard claims should be processed within 28 days. If the CAA requires more information, the speed of processing will depend on how quickly a claimant responds to a request for documents.
Monk said: “Traditional package bookings should present no difficulty. In others, the claims handlers may ask for more documents. It will be a concern if payments are delayed. It could potentially put a business at risk.”
He added: “There will be a number of claims where the CAA decides not to pay and the claimant believes it should, then the documentation will be key.”