The number of firms renewing their Atols by the deadline of March 31 matched last year, despite concerns that the economy and the recent Travel Republic court victory would prompt a decline.


The renewals were also expected to be tougher after Lombard, one of five financial institutions underwriting bonds, pulled out of the sector. However, a spokesman for the Civil Aviation Authority (CAA) said there was “good news” as a high number of companies had renewed.


Alan Bowen, legal adviser to the Association of Atol Companies, said between 75 and 100 companies let their licence lapse, adding: “These were small companies which realised they weren’t going to get through. This year was on a par with previous levels.”


Many firms are continuing to use their Atol as they await the result of the CAA’s appeal against the not-guilty ruling in the Travel Republic case. However, a CAA defeat could see more companies selling dynamic packages without an Atol, according to Bowen.


The industry could have to wait longer than expected for clarification of the Atol regulations if a hung parliament is created in the forthcoming general election, he predicted.


Bowen said: “Protecting holidays will not be on the radar for a hung parliament. If there is not a clear winner in the election, it could be optimistic to expect Atol reform by October 2011 (as the CAA has predicted).”