Senior industry figures have expressed concern that the CAA’s Atol reform proposals make no reference to the state of the Air Travel Trust (ATT) fund which underpins consumer financial protection.
The fund was cleaned out by Thomas Cook’s failure in September 2019 which cost the trust £444 million and required a back-up insurance policy payout.
The CAA Request for Further Information on Atol reform, published in January, reveals nothing about the financial state of the fund but notes the CAA is acting “as requested by the government via the trustees of the Air Travel Trust” and is considering “a number of scenarios based on different capital requirements . . . on the basis that the Air Travel Trust no longer requires government support”.
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Alan Bowen, advisor to the Association of Atol Companies, said: “We’ve no idea how much is in the Air Travel Trust. There is nothing in the document to say how much they think they need. It would be helpful if the CAA would give a clue. It must be getting updates [on the fund] weekly.”
The most-recent statement on the fund revealed it held £45 million on September 28, 2021, with a back-up facility of £75 million available to May 2024 and an expectation the government “will provide additional financial support as necessary”.
ATT financial statements for the 12-month periods to March 2021 and March 2022 remain outstanding.
Trailfinders founder and chairman Sir Mike Gooley revealed he made a Freedom of Information request to see the accounts in January. He accused the trustees of being “delinquent” in not publishing them.
Travel Weekly was awaiting a CAA response prior to going to press. But CAA head of Atol Michael Budge has made the case for reform, arguing it aims “to increase the financial resilience not only of the scheme but also the wider industry”.
Budge confirms “a form of segregation of funds is our emerging preferred option”, but notes “businesses have different structures and ways of operating” and there are “several potential options on how segregation . . . could be implemented”.
He insists the CAA wants “to dispel the view that the reform is only about mandatory trust account arrangements”.