The Civil Aviation Authority is considering “a third way” to offer a regulatory solution for companies which will struggle to afford a standard Atol once the Small Business Atol is scrapped.
The rethink for companies sitting in the so-called “middle ground” follows a high response rate to the CAA’s consultation on abolishing the SMA and introducing new risk-based financial criteria.
Of the 139 responses on the Atol reform consultation, the majority were on the SBA, said Richard Jackson (pictured), CAA consumer protection group director. Around 1,000 small and medium-sized travel companies licensed for 500 or fewer bookings currently have a SMA.
Jackson said the responses had caused the CAA to think about companies which fall between accredited bodies and those which “cannot easily become standard Atol holders” because of the additional cost.
He said: “This was a high response rate and gave us a lot to think about. We did scratch our heads a bit. If there is a problem, it is encumbent on us to find a solution. We are now working through the responses and looking at that middle ground and an appropriate way to regulate it.
“Can we live with standard Atols and accredited bodies or do we need something for people who cannot easily become standard Atol holders?“
The CAA is now assessing the amount of customer money at risk in this “middle ground” and hopes to come up with a solution in the new year.
“There is a lot of support for some sort of a financial test, which the SBA did not have. What we are now trying to assess the amount of customer money at risk and it will depend on the number of companies involved and the risk involved.”
The abolition of the SMA has been criticised because it will require many small Atol holders to increase their share capital from £30,000 to £50,000 and a new licensable turnover minimum of £500,000.