The Department for Transport may have seriously overestimated the impact of the proposed flight-plus Atol when it announced in January that consumer financial protection would be extended to six million holidays.
Travel Weekly understands both the big-two travel groups, Tui Travel and Thomas Cook, believe two million flight-plus sales is a more realistic estimate of the business likely to be brought into the Atol scheme.
Tui Travel chief executive Peter Long told Travel Weekly: “I never believed flight plus would bring five million holidays into the Atol scheme. Two million seems more realistic.”
The DfT’s assertion that the reforms would bring six million unprotected bookings a year into the scheme was based on a provisional industry estimate that flight plus would cover five million holidays.
DfT officials are working on a more accurate assessment of the impact of flight plus at the moment. Travel Weekly understands Abta has been in to see the DfT recently, as have the major tour operators.
A senior industry source told Travel Weekly: “No one knows how many seats are sold in different ways. These have been trade estimates. No one knows how many flight-plus bookings are sold. The best estimate will be what the DfT puts out in the consultation document. That may or may not prove to be correct.”
The figures will be vital to the DfT impact assessment on flight-plus, which will form part of the consultation process.
A substantially lower number of flight-plus bookings than previously estimated would delay the reduction of the deficit in the Air Travel Trust Fund and scupper any prospect of a speedy reduction in the £2.50 levy or Atol Protection Contribution (APC) on bookings.
Abta chairman John McEwan revealed last month that the association would lobby for a reduction in the £2.50 rate as part of the consultation.
Sources suggest there is “no likelihood of a reduction” until the deficit is paid off.
The extent of the fund’s deficit will be revealed in May when the DfT releases consultation documents, but it will be in excess of£30 million and probably closer to £40 million.
Travel Weekly also understands the timing of the flight-plus Atol’s introduction could slip.
The DfT has said it would like the extended Atol scheme in place by the peak booking period next year and the Civil Aviation Authority (CAA) has said the reform could be completed in time for January. But spring 2012 now appears likely.
ASB law associate Helen Mead told an industry seminar on Atol reform at the end of March: “The CAA says it hopes to implement flight plus later this year, but it will be 2012 at the earliest.”