The Civil Aviation Authority has suggested Flight-Plus will force agents to think twice about using some airlines when selling dynamic holidays.
CAA consumer protection group deputy director David Moesli said: “Agents have not been particularly discriminating about what sort of products they sell.”
Moesli told a Vantage Insurance seminar on Atol reform last week: “Agents will have to think about some of the airlines they sell. If you are going to buy from a particular airline, you need to ask ‘are they going to be around for the long term?’”
He argued: “Many suppliers are based offshore. It may be they offer good prices, but they are not regulated in the UK.”
Travel law professor David Grant told agents and Atol-holders at the seminar: “Using dodgy airlines to go to remote airports has become a commercial risk.”
However, Alan Bowen, legal advisor to the Association of Atol Companies (AAC), said agents often have little choice in which airlines to offer clients. He said: “A lot of agents go to existing Atol holders and have no choice which airline they book.”
The issue will be important following reforms to the Atol scheme at the end of April since agents who act as Flight-Plus arrangers will be liable to re-book or refund clients if an airline fails.
The problem for agents is compounded by the difficulty and expense of obtaining airline failure insurance.
Vantage Insurance underwriter Alan Lumsden said: “Supplier failure insurance is a very limited market. There is essentially only one provider and we don’t see new providers coming in because too many airlines have failed over the years.”