The CAA is poised to drop plans to scrap the Small Business Atol (SBA) given the opposition from agents and operators.
A formal decision is unlikely until later this month, but Travel Weekly understands the SBA will be retained in a modified form. The CAA will go ahead with plans to tighten financial criteria for small and medium-sized Atol holders, but this will not now start from April.
The regulator announced proposals to abolish the SBA and impose “risk-based” financial criteria on firms with Atol revenue of up to £5 million a year at the end of June. There are 950 SBA holders licensed for 500 or fewer bookings a year – about half the firms with Atols.
The changes would increase the cost of compliance, but the CAA said a heightened risk of failure among smaller companies made them necessary.
Abta urged the CAA to postpone the plans in October, with head of financial protection John de Vial describing them as “over the top”.
De Vial said the CAA “should not run ahead” of a European review of the Package Travel Directive (PTD). “This will create a new regime for three-quarters of Atol-holders,” he added.
CAA consumer protection group director Richard Jackson told November’s Aito conference the CAA was examining the “middle ground” in light of an industry response which “gave us a lot to think about”.
A source suggested: “The SBA was driven by the number of passengers. If the CAA carried on with SBAs, could there be a limit on turnover? No one disagrees there should besome sort of financial test.”
Modified proposals should be published at the end of January. However, substantive changes are unlikely before May’s general election.
Instead, further Atol changes are now probable alongside revisions to the PTD. The CAA declined to comment.
A revised PTD is expected this spring to come into force in 2017 (Travel Weekly, December 11).
CAA head of Atol Andy Cohen will appear in a panel debate with Mark Tanzer of Abta at the annual Travlaw event in London on January 13. For details, email rivka@travlaw.co.uk