CAA being ‘more pragmatic’ with Atol renewal process

The Civil Aviation Authority is being “more pragmatic” with the Atol renewal process, according to a panel of experts at Travel Weekly’s Future of Travel 2022 conference.

However, the process of bond renewals with Abta is “tough and slow”, delegates at the London event heard during the Ask the Experts session.

When asked about the September Atol renewals, Chris Photi, head of travel and leisure at White Hart Associates, said the process had been easier than the previous two or three renewal processes, thanks to mechanisms that had been developed by the CAA’s Atol team.

“The CAA is broadly pragmatic in their outlook,” he said.

Joanna Kolatsis, director at Themis Advisory, agreed, saying: They have been much more commercial in their approach. It is a less fraught experience.”

And Martin Alcock, director at Travel Trade Consultancy, commented: “It feels like less hard work.”

Photi added: “The CAA tries to work with the Atol holders and me and Jo and Martin to try to help and renew.”

However, when it came to Abta bond renewals, Alcock said the process was “tough and slow”.

He said the association has changed its approach throughout the pandemic and now based its calculations based on the amount of customer money at peak risk.

The panel also pointed out that the CAA and Abta are constrained by the fact that they lost staff during the pandemic.

Kolatsis said: “Now it’s Abta being more stressful than the CAA; Abta seem to be a bit harsher in their approach now.”

When asked about what’s causing the most stress, Photi said: “Abta, Abta, Abta, no question. It’s the max peak bond approach. It is fraught.”

The panel did not think the fact that £30-million worth of Atol-protected refund credit notes (RCNs) remain unused was a major problem.

The notes may still be used to make a booking beyond the end of September, providing the redemption expiry date is not linked to the Atol-protection expiry on September 30.

But if the travel company which issued the RCN subsequently failed, the credit note would be rendered worthless.

Alcock said much of the £30 million was a “long tail of small amounts” such as deposits.

“It is not a major issue,” he said.

He said that RCNs should be seen as another example of government support during the pandemic, such as loans and furlough.

“There is a place for them to be turned on in major crises, but we should not roll back on tour operators’ obligations to refund; they should be like an ‘emergency red button’,” he added.

Rachel Jordan, ABTA director of membership and financial protection, said: “This September bond renewal cycle has been much smoother than previous renewal cycles that we’ve managed over the past two years.

“Obligors are writing new business and/or higher bonds, and a new Financial Failure Insurance (FFI) provider has recently come to market which is very positive news.

“The majority of our members have renewed their bonds without significant difficulty. Where bonds have increased to continue providing sufficient protection, this reflects the higher amounts of money that businesses are collecting as travel recovers – which is great to see”.


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