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Atol reform welcomed but will remain ‘flawed’ says Abta

Abta issued a qualified welcome of government proposals to extend Atol consumer protection to dynamically packaged holidays, saying the system would remain “flawed” so long as it excludes scheduled airlines.

Thomas Cook echoed Abta’s response with a statement saying: “We hope today’s decision is just a stepping stone and that, in future, the scope of the Atol system is widened to include airlines.”

Travel association Abta hailed the proposals as a step forward, but said: “By excluding airlines and website click-through sales from the scheme, they remain flawed. These exclusions will perpetuate confusion among consumers.”

In a statement, Abta said: “Pricing of the scheme is critical. The costs of the Atol scheme to the travel trade, and ultimately the consumer, must not be at a level that will drive consumers to seek out cheaper, unprotected arrangements (such as booking direct with airlines) and wreck successful business models.”

It called for “strong enforcement measures to avoid consumers being left high and dry by unscrupulous traders”.

In fact, the government’s statement this morning makes clear the charge on Atol-protected holidays – the Atol Protection Contribution (APC) – will remain at £2.50 until the deficit in the fund that pays out to consumers is cleared. This could take two years.

Thomas Cook also welcomed the announcement “as a step in the right direction”. But a spokeswoman said: “There is still going to be confusion for British holidaymakers – this is not the complete solution to consumer protection. Only when the Atol system is widened to include airlines will holidaymakers be able to have total peace of mind.”

Abta has lobbied hard for reform on the lines now proposed by the government and Thomas Cook director of government and external affairs Andy Cooper played a major role in drafting early proposals of an extension of Atol to ‘flight-plus’ sales when he worked at Abta.

However, some Abta members are opposed to the reforms – including Abta board member Kane Pirie of leading online retailer Travel Republic.

Abta chief executive Mark Tanzer said: “Financial protection should be comprehensive and transparent. British consumers and our members deserve better than the unfair and unclear structures we have suffered in recent years.

“While the government’s proposals go some way to addressing the problem, we’re disappointed that airlines and online click-through sales have been excluded, as these will create competitive imbalance and leave passengers exposed.”

Others in the industry welcomed the proposals with less qualification. Association of Independent Tour Operators (AITO) chairman Derek Moore:

“We’re very pleased to hear the government intends to implement [this] by the end of the year. We’re also pleased to read the minister believes there is a case for primary legislation which she’ll be considering further in the course of the year.

“The devil is in the detail, but we find the proposal very encouraging and it should help to level the playing field, bring credibility back to the ATOL system and it is good news for consumer.”

Moore described the announcement as “less welcome news to those who have misrepresented their intentions in the past”.

Industry accountant Jonathan Wall, managing director of Elman Wall Travel Accountants, said: “This will go some way to levelling the playing field between the fully protected tour operators and agents dynamically packaging on and off line.

“It will be interesting to see the responses in the consultation by those who are being dragged kicking and screaming into the Atol scheme.”

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