CAA chairman vows to improve financial protection

The head the CAA has told the Abta Travel Matters conference that the industry must carefully consider the practice of using customer money as working capital.

The issue, highlighted particularly during the Covid-19 pandemic, forms part of the latest consultation on Atol reform currently being undertaken by the CAA.

Sir Stephen Hillier, the regulator’s chairman, said any change in the regulations governing consumer protection would take account of the fragile state of the sector due to the pandemic.

But he told the virtual conference: “We need to consider very carefully the practice of advanced customer monies being used as working capital.

“Our goals are straightforward: better protection of consumer money, improving financial resilience of Atol holders and of the scheme itself.

“I offer the view that we should be considering better ways to protect customers and their money to give them confidence in travelling. That’s what the Atol scheme is all about.”

Hillier said the CAA is aware of the “trying and challenging” circumstances for the industry and is doing all it can within its regulatory authority to support the sector while looking after consumers.

“We share the industry’s desire to re-open international travel at scale as soon as it is possible,” he said, adding he welcomed open and transparent dialogue with the sector about the safe return of travel.

“Perhaps, more than anything, our strategy is about learning from the experience of Covid and our ability to respond quickly and effectively under severe pressure.

“We need to be part of shaping change, not just reacting to it.”

The CAA has welcomed government plans to give it greater enforcement powers, and Sir Stephen said consumer feedback about refunds from airlines has been prominent in recent research.

“Our aim is to provide fair and balanced regulation across everyone we regulate,” he said.

“Our powers differ across each part of the sector, but we will always hold businesses to account…and we will work with other regulators to support other action.

“We have kept the actions of airlines under review throughout the last 16 months with the Competition & Markets Authority.

“Our experience has confirmed to us, and importantly to consumers, that our current powers need to be strengthened.”

The CAA’s focus is on the changing risk profile of a sector that is running at just 20% capacity and has seen widespread job losses and employees placed on furlough.

Hillier said it will take time for the sector to get back to pre-pandemic levels but that the regulator must continue to ensure it operates as safely as it did before Covid.

He said the industry must take a “leading role” as consumers demand decarbonisation and, in the long term, moves towards net zero, “a key part of any future for all of us in the enterprise”.

“We all know the sector thrives on the opportunities it gives people to see the world,” Hillier said.

“Travel agents, tour operators and travel experts know better than anyone just how much holidays mean to people across the UK.

“Travel businesses rely on consumers to have the confidence to book what is often the most significant financial commitment each year. Rebuilding this confidence is vital.”

Hillier said the CAA will work with other government departments and with counterparts internationally to coordinate regulations and to provide transparent guidance.

“It will take time and will before we can achieve high levels of alignment, but such things can be achieved,” he added.

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