The CAA is poised to issue a “call for evidence” on Atol reform as a prelude to a second consultation next year.
CAA head of operations for aviation and travel Michael Budge confirmed there would be a release “very shortly” to “seek more feedback from the industry”.
Budge told a Travel Weekly Business Breakfast: “It’s a chance to comment before we set out the final consultation. Think of it as a call for evidence.” He also confirmed “there will be a transition period” for the reforms, but declined to give details.
More: Atol Reform: Industry delivers lukewarm response to CAA proposals [June 22]
CAA releases summary of Atol Reform responses a year on from consultation [May 22]
The proposed reforms, first published in April 2021, would require Atol holders to use trust, escrow or separate accounts for customer money, or to provide bonds or a combination of the two.
Deloitte partner and head of travel law Farina Azam said: “It’s clear from the consultation the CAA is not happy about [businesses] using customer money as working capital.”
Aviation minister Baroness Vere confirmed the government’s thinking last week, telling Abta’s Travel Matters conference: “We can’t have people operating on wafer thin margins relying on payments from customers yet to take their holidays.”
Azam said: “Baroness Vere was clear, but it was in the consultation anyway [and] it’s how the CAA has been pushing the industry for the past few years. The CAA tends to push companies into a form of segregation or trust account if it’s not happy with its financial assessment when an Atol comes up for renewal.”
She forecast an implementation period of “18 months to two years” and warned smaller Atol holders “will potentially be disproportionately impacted”, saying: “If you’re a smaller business you probably have to pay suppliers upfront. You won’t be able to use a customer’s [money] any more. You’re going to have to cover those upfront costs yourself. That is one issue, and then there aren’t many bond providers. If you’re a small business, it might be more expensive to get a bond.”
Julia Lo-Bue Said, chief executive of The Advantage Travel Partnership, said: “We’re hoping the consultation will support the need for not one size fits all.”
More: Atol Reform: Industry delivers lukewarm response to CAA proposals [June 22]
CAA releases summary of Atol Reform responses a year on from consultation [May 22]