The CAA has acknowledged widespread industry concern at the prospect of Atol reform being pushed through in isolation from a Department for Business review of the Package Travel Regulations and without action to address the risks of airline insolvency.
CAA head of Atol Michael Budge revealed the authority regularly passes on industry concerns on airline insolvency to the Department for Transport (DfT), but insisted “it’s right” to consider Atol reform separately.
Speaking on a Travel Weekly Future of Travel webcast, Budge said: “There have been a lot of comments on this. The Airline Insolvency Review is a matter for government and not something that sits within the CAA’s purview.
“Obviously, the CAA supported the Airline Insolvency Review work and the proposals. We continue to engage with relevant government departments on this.”
But he insisted: “We believe it’s right to look at how the Atol scheme should be set up for the future whether or not that dovetails into other areas of reform.
“We manage the regulatory environment for licensed air passengers [and] we have to think how that sits in the UK system as it currently exists. We can only control what we control.
“We can make recommendations. We talk to the DfT and the Department of Business on a regular basis, the DfT weekly. We constantly pass on the feedback we receive from the industry.”
Budge rejected a suggestion that the CAA’s Atol reform proposals were primarily a response to the failure of Thomas Cook in September 2019.
He agreed the CAA’s initial Atol reform consultation “came after the failure of Thomas Cook and the start of the pandemic”, but he said: “The rationale to look at changes to the Atol scheme stemmed from before Thomas Cook and wasn’t a reaction solely to that failure.
“It was a reaction as well to the way certain operators in the travel industry were financed and capitalised [and] risks in relation to their resilience.”
Referring to the CAA’s ‘Request for further information’ on Atol reform issued in January, Budge pointed out: “We specifically asked for feedback on how we should be thinking about businesses that are vertically integrated and have an airline within them.
“We’re asking for views on whether we should be looking at those businesses differently.”
The deadline for submissions to the request for information is this Friday, March 24.
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