The rate of travel company failures has near doubled in the past year, with refunds to consumers at record levels. At the same time, record numbers of holidaymakers are travelling abroad without financial protection.
The Air Travel Insolvency Protection Advisory Committee (ATIPAC) reports 46 ATOL-holding companies ceased trading in the year to the end of March, up from 25 in the previous 12 months.
The ATOL scheme protects holidaymakers from being stranded abroad or losing money on holidays or flights bought from tour operators. That protection is financed by a levy, or ATOL Protection Contribution (APC), on holidays, which will rise from £1 to £2.50 from October 1.
More than 240,000 holidaymakers were refunded for bookings under the scheme in the past year, and 48,000 repatriated from overseas – most following the collapse of XL Leisure Group, the UK’s third largest charter operator, last September.
ATIPAC chairman John Cox said: “The difficult economic conditions have put real pressure on the travel industry. Too many consumers do not realise their holiday arrangements are unprotected…where customers are separately contracted for flights and accommodation.”
He called for the scheme to be widened to include so-called dynamic packaging, saying: “Expanding the scope of ATOL to all flights sold with another holiday component will help end the confusion.” ABTA has also called for such an expansion of the ATOL scheme.
ATIPAC published its annual report today. The committee was established in 2000 to advise the government and Civil Aviation Authority on consumer financial protection.