The consumer-protection levy on holidays will stay at £2.50 per person for the first two years of the new flight-plus Atol despite up to six million additional payments a year going into the Air Travel Trust Fund.
The Civil Aviation Authority, which oversees financial protection for holidaymakers, will not release details of the flight-plus licence and payments until the Department for Transport issues a consultation document in May.
But Travel Weekly understands the current £2.50 rate of Atol Protection Contribution (APC) on sales will not change until 2014 – assuming there are no major failures in the meantime.
However, the CAA will review the level of funding well before that, with an industry consultation on the issue possibly before the end of this year.
The government unveiled plans last week to create a new flight-plus Atol to cover separate sales of a flight and accommodation by a retailer. The licence will come into force next year, extending financial protection to an estimated six million holidaymakers who do not buy a traditional tour operator’s package.
The CAA confirmed this week that it would “initiate a review of the [APC] funding level before the fund goes into surplus”.
This will include the prospect of an alternative system of funding to replace the APC after 2014 – when the historic deficit in the Air Travel Trust Fund (ATTF) has been cleared and the fund moved into surplus. The CAA promised “a consultation on how the industry wants to go forward”.
The ATTF was almost £32 million in deficit at the end of the financial year to last March and has paid out on two substantial failures since then – involving Goldtrail Travel and Flight Options. However, as much as £50 million will have been received in Atol payments.
Details of the ATTF’s current finances are not likely to be published until May.