The advisory body to government on financial protection for holidaymakers called today for legislation to extend protection to all sales by airlines.

The Air Travel Insolvency Protection Advisory Committee (Atipac) welcomed the Flight-Plus regulations introduced in April as a “first phase of Atol Reform” in its annual report published this morning, but said: “Much more must be done to protect holidaymakers.”

The Atipac report notes a heightened risk of travel company failures amid little prospect of “any short-term recovery of the industry”.

Atipac includes representatives of industry regulator the Civil Aviation Authority (CAA), Trading Standards and consumer groups as well as industry associations such as Abta, the Association of Independent Tour Operators and Travel Trust Association.

In a forward to the report addressed to transport secretary Justine Greening, Atipac says: “There is some way to go to extend the protection provided by the Atol scheme to the wider travelling public. . . The government does need to implement primary legislation to extend protection to all sales made by airlines.”

Atipac believes the forthcoming Atol Certificate, due to be introduced on October 1, “will give an enormous boost to awareness of ATOL, which is long overdue”.

But it adds: “Many air travellers will still fall outside the safety of the Atol umbrella.”

Atipac chairman John Cox said: “Atol reform is very welcome. But it is a belated recognition that the travel industry has changed beyond recognition in the past 20 years. There is much, much more to do to create clear and comprehensive financial protection for holidaymakers.”

The report notes the outlook for the industry is “one of instability” amid “reports of airlines reducing capacity during the summer period.

“Increases in Air Passenger Duty and in the cost of fuel add to airlines’ costs [and] these are inevitably passed on to tour operators and thence to customers.

“None of this bodes well for any short-term recovery of the industry.”

The Atipac Annual Report is available here: