Abta appears unlikely to provide Atol cover for agents to meet the new Flight-Plus regulations, leaving many businesses in limbo.
Advantage has also retreated from plans to become an Atol Approved Body and will instead offer franchise arrangements. The alternative will be for each agency to hold its own licence.
The Civil Aviation Authority (CAA) issued details of the Flight-Plus changes and draft standard terms this week. These made clear an Approved Body will be liable for refunds and repatriation of consumers if a member fails.
Abta head of financial protection John de Vial said the association could not take such a role. He said: “An Approved Body will, in effect, act as an umbrella Atol. No trade association would give a blanket trading guarantee for members. It would be a misuse of members’ funds.”
Yet without approved bodies the CAA will have to license the entire industry.
The CAA said it was “happy to talk about other proposals”. But David Moesli, deputy director of the consumer protection group, said: “It’s essential an Approved Body takes responsibility for members. There can be no comeback on the Air Travel Trust unless the Approved Body gets into difficulty.”
Advantage chief executive John McEwan, who is also chairman of Abta, said: “Franchise Atols appear the route Advantage will take.”
He said: “Two-thirds of our members already have an Atol, so we’re looking at those that sit outside Atol. We’ll look at a franchise Atol arrangement with trust account protection. As a franchise Atol holder we can control what is sold.”
McEwan added: “There will be a question mark over who might become an Approved Body.” The Association of Atol Companies suggested the rules would drive bookings to its members.
It said: “The changes should increase opportunities to sell through agents who may not want the hassle of becoming an Atol holder or seek cover under an Approved Body.”