CAA head of Atol Michael Budge is hopeful a consultation on detailed proposals for Atol reform will be signed off by the Department for Transport next year.
Speaking at the Travel Weekly Future of Travel Conference in London last week Budge confirmed there was unlikely to be progress on Atol reform before the end of this year but said he would “definitely hope” to see a consultation on final proposals next year.
The CAA initially consulted on reform of the Atol consumer financial protection scheme in April 2021 and had hoped to complete the process within two to three years.
However, the aviation regulator confirmed a delay to the reform process in January this year, attributing it to the “complex” work required following industry responses to a CAA ‘Request for Further Information’ issued in January 2023.
Budge declined to comment on the likely timescale of the proposed consultation but said the CAA would work closely with the government to achieve progress on reform, saying: “I think it’s really important for everyone’s sanity and for clarity and certainty.”
He acknowledged that businesses would need to be able to plan in light of any changed Atol requirements and the financing options available.
Abta head of legal affairs Simon Bunce questioned whether there is a need for reform of the Atol scheme, suggesting increasing numbers of travel companies had begun segregating customer money from business accounts since the first consultation.
Bunce argued: “A lot of businesses have seen the direction of travel and started putting those [segregation] measures in place anyway, so I question whether the CAA needs to do anything more formal and structural in light of what has happened since that [first] consultation came out.”
Asked whether he expects more clarity on reform in the coming year, Bunce said: “I don’t think anything is going to happen.”
Budge noted it would be up to the government to decide on reform, saying: “We have a new government, and we have to understand their direction of travel and where they want to position things moving forward.
“Whether or not Simon’s view on this is where we end up would be inappropriate to say at this point. But what I would say is that we’re reflecting on what the market looks like now.
“When we [first] consulted, it was post-Thomas Cook [failing] in an environment when businesses were challenged by Covid. We’re now in a different place. But we need to reflect the fact that certain businesses still exhibit challenges and that has become clearer with some [businesses]. Others are in a very good place. So, there is a need to determine the right regulatory response for the market.”
Picture: Michael Bunce speaks from audience at Future of Travel 2024. Credit: Alex Maguire Photography