The CAA has “no intention” of raising the £2.50 Atol Protection Contribution (APC) on holiday bookings in the wake of Thomas Cook’s collapse.
Dame Deirdre Hutton, chair of the CAA, denied the repatriation and refund of Cook customers would cost the widely reported £600 million but conceded it will “clean out the trust”.
She said: “I don’t know where that figure came from. We estimate the cost of repatriation at £100 million, 60% of which will be paid by Atol [with 40% paid by the government to cover flight-only bookings].
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“There are 360,000 forward bookings and we estimate the Atol payouts at £420 million.”
Hutton said “there is no intention” to raise APC and insisted Thomas Cook’s failure is “not going to make the trust insolvent”.
She added: “We have a borrowing facility. My expectation is it will continue as it is. That does not mean that, if there is a series of failures, we won’t have to look at it.”
Hutton was responding to concerns raised by a senior industry source who told Travel Weekly: “If the bill for the failure is £600 million it would take out the Air Travel Trust fund and [the fund’s] insurance. How much might the APC be increased to replenish the fund?”
She acknowledged: “I’m sure there will be some failures. It’s inevitable.”
Hutton confirmed Thomas Cook customers should be able to seek refunds online from October 6. About 100,000 who paid by direct debit will be refunded within 14 days. The remaining refunds will take 60 days “because of the volume and complexity”.
“Part of the problem is the dispersed nature of the Cook databases,” Hutton explained. “Data is spread over more than 100 data‑processing sites across Europe.”
An industry source said the lack of data, in part caused by Thomas Cook going into liquidation rather than administration, was causing problems.
They told Travel Weekly: “Where an administrator would want the systems up and running, none of that has happened. There is no attempt to salvage the business. The liquidator shut down all the servers.
“There are no consumer issues, but there is real pain in the trade. There was a lot of third-party tour operator business with Cook and there is a hit on the balances paid in September. These balances and commissions [to third-party agents] have been lost. Where the balance has not been paid, in most cases the tour operator will pay commission.”
Some Thomas Cook agents also appear to have collected balances on bookings with third-party operators early. The source said that was “a concern for third-party operators” if they find a customer paid the balance early.
Travel Weekly understands tour operators which made credit available to Thomas Cook may have lost out as these sums would be outside Abta’s protection of pipeline monies.
The source said: “The bigger the retailer, the more they can say ‘you must give us credit.’ Cook had this as a condition of being racked. Operators have a choice. It’s too early to tell whether some have been reckless.
“I wouldn’t be surprised if there were to be some failures. There is no evidence yet of anything more widespread. But things could accumulate if we get a rolling Brexit.”
Abta confirmed its Travel Convention will go ahead in Tokyo next week despite the fallout from the failure and the cancellation of upcoming conferences by Hays Travel and Midcounties Co-operative.
Mark Tanzer, Abta chief executive, said it was “too early” to say whether Thomas Cook’s collapse could bring down other companies, but he acknowledged: “The impact will be felt by operators selling through Thomas Cook shops and right through the supply chain.”
He dismissed suggestions that the collapse could mark the end of the package holiday. Instead, he said “it demonstrates the value of a package holiday and the protection that goes with it. The system has worked.”
More: Interview: Thomas Cook ‘failed to grasp rescue chance in 2012’
CAA chair accompanies 400 Thomas Cook passengers
Travel businesses rush to snap up redundant Thomas Cook staff