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Government urged to act on PTD after Lowcost collapse

The Air Travel Insolvency Protection Advisory Committee (Atipac) has written to the government urging it proceed with plans to implement the new European Package Travel Directive (PTD) despite the UK vote to quit the EU.

In a letter to new transport secretary Chris Grayling, Atipac chairman John Cox asks the government to proceed “with deliberate speed . . . despite the committee’s concerns on some aspects of the directive”.

Cox tells the secretary of state: “Travel companies must have sufficient time to implement any changes to the current Atol regime.”

He warns: “The recent collapse of Lowcostholidays is a stark reminder of the importance of making sure UK consumers have effective protection whoever they book with, and that they fully understand how their holiday is protected.”

Mallorca-based Lowcostholidays ceased trading on July 15 and traded in the UK outside the Atol regime, leaving consumers without the customary financial protection.

The Atipac committee comprises representatives of the travel trade, the industry regulator, the CAA, consumers and airlines.

It reports just 10 Atol company failures in the 12 months to March, fewer than last year and the lowest number since 2003-04.

The small number of failures, allied to the continuing imposition of a £2.50 Atol Protection Contribution on all package and flight-plus holiday bookings, left the Air Travel Trust fund which underwrites Atol consumer financial protection with a £139 million surplus in March.

The fund is likely to have a surplus in excess of £150 million by now.

Atipac estimates the cost of failures over the 12 months at £4.9 million, of which £4.77 million will be paid by the fund.

The biggest failure over the period was that of Exclusive Escapes, which ceased trading in September last year with 339 holidaymakers abroad and requiring repatriation and another 2,693 requiring refunds of bookings.

It’s estimated the failure will cost the fund £3.5 million.

Five of the 10 failures were of Small Business Atol holders licensed for a maximum 500 Atol customers.

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