The deficit in the Air Travel Trust Fund that provides financial protection to holidaymakers reached £35 million this month – up £3 million on a year ago.
The Civil Aviation Authority (CAA) and fund trustees revealed the level of debt to members of the Air Transport Insolvency Protection Advisory Committee (Atipac) on Friday.
The debt is significant as it is half-way to the overdraft limit of £70 million provided by the government and banks. However, there has been speculation in the industry that the debt is close to £50 million.
At the same time, the CAA revealed the final cost to the fund of the past year’s two biggest failures, Goldtrail Travel and Flight Options, would be between £41 million and £46 million – the CAA’s original estimate – and not the £25 million Travel Weekly reported a week ago.
The CAA said the number of claims for refunds referred to credit-card providers “do not come to very much”.
It is seven months since Goldtrail ceased trading and six months since Flight Options, also known a Kiss Flights, followed it into liquidation. Yet not all the potential claims have been submitted, with consumers and their travel agents allowed 12 months from the date of a failure to submit a claim.
The CAA believes the bulk of the one-third of claims outstanding belong to agents.
Cash continues to flow into the Air Travel Trust Fund ATTF from the £2.50 per person Atol Protection Contribution (APC) on package holiday bookings.
Another £5 million was paid at the end of January but not included in the deficit figure and more will go in by the end of the financial year.
Companies make APC payments to the fund monthly, quarterly or annually depending on their size.
CAA consumer protection group deputy director David Moesli said: “We wanted to clarify the state of the Air Travel Trust Fund and the cost of the big failures last summer.”