The Civil Aviation Authority (CAA) update on Atol reform, published last week, has drawn criticism from industry leaders, with Abta chief executive Mark Tanzer asking, “What are they trying to fix?”
Speaking at the annual Travlaw Big Tent Event in London last week, Tanzer said: “What is the problem the CAA is trying to solve?
“Is it that the Air Travel Trust fund periodically gets hit? Is it duplication of [consumer financial] protection? Is it that the flat rate Atol Protection Contribution [APC] is unfair? What are they trying to fix?”
Tanzer argued: “There have not been a lot of [Atol] failures for a long time. The problem is when we get a big failure.”
The CAA published its Atol reform update and a ‘request for further information’ last week with a two-month deadline on responses to its proposals ahead of a further consultation later this year.
The document confirmed the CAA’s preference for segregation of customer money, with bonding as a back-up, and a move to a variable APC and gave notice the new regime could start as soon as April 2024.
Tanzer suggested that was unlikely, saying: “It’s not going to be ready by April 2024.”
He noted “some interesting points” in the update, arguing the CAA “has accepted customer payments will be taken early and that the financial markets aren’t going to be able to cover the whole industry.
“They have taken onboard the fact that total segregation is not going to work [in favour of] a more varied arrangement of separation [of customer money] and bonding, with a variable APC.
“But it [the document] doesn’t refer to the Package Travel Regulations at all.
“What we don’t want is two separate schemes. There is an issue with airlines’ [failures]. And there are other issues – one is cost. If we’re going to have hundreds of trust accounts, what is that going to cost? And there is the question of repatriation. If we get a big failure, who is going to pay for it?”
Julia Lo-Bue Said, chief executive of the Advantage Travel Partnership, argued “there is a still a sense of a sticking plaster” with the proposals, saying: “There is a still a lot to worry about.”
Travlaw senior counsel Stephen Mason noted of the update: “There is an acceptance by the CAA that Atol reform will result in higher prices and less choice for consumers, but [it suggests] that is a price worth paying so that the Air Travel Trust doesn’t come under pressure.”