Tui Travel is to take all of its Thomson Airways flight-only sales out of Atol from November 1, blaming “inconsistency” of the government-run protection scheme.
The company has also revealed plans to reduce commission on charter flight-only sales from 10% to 0.1%, bringing it in line with other seat-only operators.
Tui’s move away from Atol comes after the Civil Aviation Authority, which runs the scheme, had its bid to overturn the not-guilty verdict in a case it brought against Travel Republic rejected by the Supreme Court.
The CAA had accused the leading online holiday retailer of breaking Atol rules, believing it was selling packages which should have been licensed and liable for the £2.50 per person Atol Protection Contribution.
A Tui spokesman said: “The current regulatory scheme in place is not consistent across our industry, with certain airlines not required to pay the current levy.
“This change will bring us in line with other flight-only carriers in the industry while we continue to lobby government to seek changes to the system.”
He said Tui would work with its partners to support them with the “changes to procedure”.
The decision to cut commission had not been taken lightly, he added, but was necessary to compete with other airlines.
The removal of Atol could hit some agents’ cash flow as they will have to pay the full balance on booking rather than take payment eight weeks before departure.
Holiday Discount Centre managing director Steve Campion said: “This could potentially have cash flow implications for agents in that they won’t have any pipeline monies.”
Most flight-only carriers have already gone to 0.1% commission, including Avro and Thomas Cook.