The Air Travel Trust fund has recovered to hold £139 million in cash reserves and has access to a further £75 million in borrowing facilities, confirming Atol consumer financial protection remains guaranteed.
The trustees of the fund confirmed the current state of the Air Travel Trust as they released the trust’s annual report and accounts for 2021-22 today (July 12).
They also confirmed the government continues to underwrite the Air Travel Trust (ATT) and “will provide additional financial support to the ATT as necessary”.
The trustees note “the support provided by His Majesty’s Government to the ATT over many years and recent written assurance provided by the Secretary of State for Transport”.
The government’s support was recently questioned by Trailfinders’ chief executive Toby Kelly who suggested in a blog post: “Our suspicion . . . is that the ATT no longer has the backing of the Treasury and as such is no longer a going concern.”
Kelly also called for the release of the accounts, pointing out they were long overdue. However, Travel Weekly understands leading Atol holders had been informed the accounts would be published this month.
The restoration of reserves comes after a difficult three years, with the liquidation of Thomas Cook in September 2019 wiping out most of the Air Travel Trust fund and its back-up insurance.
Cook’s failure, the biggest ever, was then followed by the Covid-19 pandemic which saw international travel suspended for a period.
The trustees note there were 15 Atol-holder failures in the 12 months to the end of March 2022, down from 34 the previous year – the first year of the pandemic and state: “The number and expected cost of Atol holder failures reduced significantly.”
They estimate the total value of claims for these failures at just over £2.4 million, down from almost £11.4 million in the year to March 2021.
No passengers required repatriation, but about 11,000 customers with bookings were owed refunds.
However, the largest Atol-holder failure in the year, Truly Travel, was a member of the Travel Trust Association (TTA) and under the terms of the association’s franchise arrangements with the CAA the failure was dealt with by it and not the Air Travel Trust.
The fund held £59 million at the end of the accounting period, up from just over £28 million the previous year, and had risen to £139 million by this week following the relaxation of pandemic travel restrictions from around March 2022.
The trust received Atol Protection Contribution (APC) payments totalling £37 million in the 12 months to March 2022 on behalf of 14.8 million passenger bookings or “just over half of pre-pandemic levels”, the trustees noted.
This was up from £20 million, on behalf of eight million passenger bookings, in the previous year.
The CAA charged the trust almost £1.8 million in expenses for the year and incurred almost £2 million in administration and professional services costs.
This year is the 50th anniversary of the Atol scheme.
More: CAA blames pandemic ‘resource challenges’ for delay to Air Travel Trust accounts
Air Travel Trust reports healthy balance despite pandemic failures
Concern raised over lack of Air Travel Trust information in Atol reform proposals