Abta’s trust scheme plan questioned by rival groups

Plans being drawn up by Abta that could see a trust scheme established for members to meet proposed Atol requirements have been dismissed by rival trade groups.

Abta confirmed it was drawing up options for members, one of which was a voluntary trust arrangement understood to be similar to that run by the Travel Trust Association.

Last month the government announced plans for a flight-plus Atol to cover bookings that included a flight and significant other holiday element.

A Department for Transport consultation will begin in May, but with the new regulations due to start in January 2012, retailers needing an Atol licence for the first time are assessing their options.

According to industry sources, the Abta trust option is being spearheaded by Kane Pirie, a member of the Abta board and managing director of Travel Republic.

Gary Lewis, TTA head of operations, said there were many hurdles to setting up the sort of Atol franchise arrangement it operates, adding: “With what you have to do to get it past the CAA I’d be amazed if anyone could do it given how hard it was for us.”

Alan Bowen, legal adviser to the Association of Atol Companies, agreed, saying the TTA scheme was backed by insurance that no insurer would now offer. “I can’t see how it works for flight-plus,” he said.

Abta chairman John McEwan said trust accounts were just one option, also including bonding and incurance, and discussions were still at a preliminary stage.

“TTA members are very different – there are a lot of new entrants so clearly you’d want a greater element of protection in place,” he said.

“With the DfT consultation coming out at the beginning of May we are starting the work now to evaluate what our options look like.

“We still have to engage with that consultation because we have made it clear, while we will work positively with the government on this, there is still a huge gap in terms of a levy on airlines.

“With flight-plus coming in to play we have to ask how do we put in place something that’s fair and equitable for our members to join a flight-plus scheme.

“The objective is for a much broader protection scheme and one that is introduced in a way that is effective and ensures retailers will buy into it and not look to avoid it.”

McEwan said trust accounts had been under discussion by the association “for years” and that the changing business and regulatory environment had only now meant it was stepping away from its long-standing opposition to them.

The TTA had presviously offered to run a trust scheme for Abta, according to Lewis, but the offer was never taken up.  

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