MAJOR operators are campaigning to have the bonding rules changed so they are free to make more acquisitions in the market.
Thomson, Airtours, First Choice and Thomas Cook have complained to the Civil Aviation Authority that its bonding requirements are outdated because they force companies to tie up capital which could be used for purchases.
The complex bonding arrangements require companies to hold up to 5% of their turnover in assets, preventing them from spending their cash reserves in the market.
CAAhead of licensing Helen Simpson said: “All the big companies are talking to us about licensing. They currently have to tie up capital for bonds and they are arguing that this is inappropriate for a major international company.
“So we are looking at using a different criteria for bonds, rather than a reliance on balance sheets.
“It is difficult because we don’t want to weaken companies. This will take time, it will not happen overnight.”
Talks with the CAA led to rumours that Thomson is to have a rights issue to fund acquisitions and also to meet bonding requirements. The operator said it could not comment on anything that might affect its share price. But Simpson confirmed that Thomson was licensed for the next 12 months and added: “This is not a Thomson issue. All the majors want change.”
The slump in Thomson’s share price to under £1 has meant the group has struggled to compete with rival Airtours for acquisitions and recently pulled out of the race for German giant DER (Travel Weekly October 11).