The government has reaffirmed its commitment to reforming the Atol scheme in the wake of the Goldtrail Holidays collapse, but the industry must wait until the autumn to know what form this will take.
Speaking in the House of Commons yesterday, transport secretary Philip Hammond said: “We are clear we have a problem with the Atol scheme [and] we have to resolve this issue.
There needs to be a refined definition of a package holiday and a refined definition of the Atol scheme. The system is not sustainable if some people have a free ride.”
Appearing before the transport select committee on Monday, Hammond praised the Civil Aviation Authority (CAA) for its handling of the failure, saying:
“The collapse of Goldtrail produced an awful lot less confusion than it could have because the CAA acted to repatriate all passengers regardless of whether they were covered by the Atol scheme.”
But he added: “We do not know how many Goldtrail customers were covered. The way people buy holidays has changed – the distinction between what is a package holiday and what is not is much less clear.”
Referring to the recent consultation on proposals to extend Atol cover to sales of all flights sold with another holiday element – so-called ‘flight-plus’ – Hammond said:
“That consultation continues. It is not a party political issue, it is an administrative issue and we will build on the work of the previous government.”
The transport secretary insisted on the need to restore clarity over holidaymakers’ financial protection. “The department’s over-arching requirement is that in the event of a collapse by a tour operator or an airline – or of natural events like the volcanic ash – there is a clear methodology for repatriating passengers,” he said.
However, he gave no details other than to say: “We do not rule out including flight only at this stage. It could be one option.”
Today is the last day of parliament until September 6 and Hammond said there would be no last-minute announcements, meaning there will be no progress on reform until the autumn.
Goldtrail customers should not have to wait up to two years for refunds as reported by some of the media, Hammond added, but the confusion about Atol cover made some delay inevitable.
“There is a problem in that many people repatriated by the CAA may believe their holiday was covered when that may not be true,” he said. “It has to be unravelled whether those who did not travel are entitled to a refund.”