The travel industry and its customers will pick up the cost of the Thomas Cook collapse through higher insurance premiums, Abta’s director of financial protection has predicted.
Writing for Travel Weekly, John de Vial said: “The insurance market, over time, will recover its costs and there are concerns about the consequential effect on market capacity and premiums.
“In the short term, we have a difficult market that is naturally reviewing risks and risk appetite, although most participants see Thomas Cook as an individual corporate failure – not a travel sector market issue.
“Ultimately, the cost will be carried by the industry and consumers.”
De Vial said estimates that the cost of Cook’s collapse could reach £1 billion were “not unreasonable”, but does not believe the £2.50 Air Passenger Charge that funds Atol’s Air Travel Trust fund will increase.
He called on the industry to lobby the next government to ensure the recommendations of the Airline Insolvency Review are implemented.
De Vial insisted that “the UK’s systems of consumer protection have worked”, and said it was encouraging to see other companies move to fill the void left by Cook, but admitted there were “lessons to be learned” from the travel giant’s failure.
“The industry responds, reshapes and reinvents itself. Innovation continues and consumers will always travel as long as we stay relevant and serve them well,” he added.
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