Atol holders renewing licenses next March will do so under the current regime and not need to meet new requirements despite the CAA’s intention to introduce a reformed Atol scheme from April 2024.
CAA head of Atol Michael Budge confirmed that Atols due for renewal from April 1 2024, a process which largely takes place in March, would be under the existing rules and these could be extended to the September 2024 renewals.
Budge told the annual Abta Travel Law Seminar in London: “Renewals in March 2024 will be based on the current framework and in September 2024 there may be the option to sit under one regime or the other.”
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He said April 2024 remains the CAA’s target date for introducing reforms to the Atol scheme but insisted: “April 2024 is not a cut-off date. It’s a ‘commencing from’ date.
“We expect to see a transition time that will depend on the extent of change.”
He suggested the introduction of a variable rate of Atol Protection Contribution (APC), which is among the proposals, should not delay the introduction of reform since contrary to the belief of many in the industry it would not require primary legislation by Parliament.
Budge argued a variable APC “would not require primary legislation but a piece of secondary legislation to be set before Parliament”.
He revealed the CAA received 289 responses to its ‘Request for further information’ on Atol Reform issued in January – almost as many as the record number of 305 responses to the initial consultation on Atol reform in 2021.
Budge told the seminar: “We are reviewing the responses.” But he identified “a number of themes” from an initial review, noting: “The diversity of opinion remains.
“It’s clear the industry wants choice about how to provide financial security [and] there is a preference for an individual, risk-based approach.
“Methods of segregation [of customer money] are not fully understood and there was a lot of focus on the costs of that.
“There is strong support for a variable APC based on the extent of protection.” Yet he also noted a desire for “a transparent and simple APC”, and said: “The question is how that could be implemented.”
He noted: “There is no support for, and no availability of, a full insurance solution to replace the Atol scheme, but some individual business could have the option of insurance [to provide protection].”
Budge added: “Operators, in particular, believe protection of agency pipeline money is important.”
He insisted: “No decisions have been made [and] the changes may or may not be significant.”
A follow-up consultation, to be issued jointly by the CAA and Department for Transport, is expected by the autumn.