The Travel Trust Association (TTA) has written to members to reassure them they are trading legally following misleading reports in the trade press.

It emerged last week that the T-ATOL franchise agreement, which provides ATOL cover for 160 TTA members, was suspended in May. The agreement, established in 2004 between the Civil Aviation Authority (CAA) and the TTA, effectively recognises that members already financially protect the dynamic packages they sell through the group’s trust accounts.

As a result of media reports claiming the agreement was unlawful, TTA operations director Gary Lewis told all members in a letter: “TTA members who hold a T-ATOL licence have not traded illegally…[and]…do not need to remove their ATOL logo and do not need to change how they are trading with their customers.”

Discussions began in January this year with the CAA over a problem with the way the franchise agreement had been re-drafted last year following the new ATOL Protection Contribution (APC). In May, the TTA and the CAA agreed to mutually terminate the 2008 agreement and a holding agreement was put in a place, pending a new detailed draft.

“This change in agreement does not affect any TTA members holding a T-ATOL licence. There is no operational impact on any part of a TTA member’s business today,” added Lewis in the letter. “A T-ATOL tells your customers you are allowed to dynamically package flight product. Your customers have 100% financial protection.”

Lewis told Travel Weekly a new agreement would be signed imminently and confirmed it was “business as usual” until then. TTA members who renewed in September this year had their licences renewed, and there will be no change for those renewing in March next year.

News of the suspended agreement emerged during the court case in which Travel Republic and director Kane Pirie are standing trial for breach of the ATOL regulations.