Trailfinders’ chief executive Toby Kelly has raised a series of concerns about the Air Travel Trust’s latest accounts, maintaining the company’s running critique of the CAA and the fund.
The Air Travel Trust report for 2021-22 was released earlier this month, a year later than normal in the pre-pandemic period, and the accounts for the 12 months to March this year remain outstanding.
In his latest blog post, the Trailfinders boss raises three “particular concerns”.
He questions “what services the CAA provides” the Air Travel Trust (ATT) in return for a “sharply rising charge”, noting the CAA’s fees have risen from just over £491,000 in 2016 to almost £1.78 million in 2022 – “a more than three-fold increase”.
In fact, the CAA administers the Atol scheme which the ATT underwrites, and the report makes clear the charges are for “operational management of the Trust’s affairs in collecting APC, arranging banking and insurance facilities, claims handling and day-to-day financial and secretariat services”.
The fees are up from just over £960,000 in the last comparable year (2019-20). But other costs have fallen. The trust incurred an insurance premium of more than £11.5 million in 2019-20 which it has not paid since March 2020.
Kelly suggests: “It is unclear whether the ATT Trustees have questioned the value of this fee.” In fact, the ATT trustees are all CAA board members so will no doubt be aware of the fee and the reasons for it.
He also argues the ‘fulfilment charges for accredited bodies’ in the accounts “needs further explanation”.
‘Accredited bodies’ are Atol holders which the CAA recognises as allowing other businesses to trade under their licence.
The £2.50 Atol Protection Contribution (APC) still applies to bookings taken by companies operating under an accredited body’s Atol, but the CAA refunds half of the payment (£1.25) on behalf of the ATT in return for the approved body handling any failure.
This is what happened in the case of the largest individual Atol failure in 2021-22, that of Truly Travel – a member of the Travel Trust Association, which Trailfinders is also a member of.
Kelly suggests “there are two [accredited body rebate] schemes in operation, one for a £1.75 rebate per passenger and one for a £1.25 rebate, [but] only the latter is referenced in the accounts”, although he provides no evidence for this.
He queries why the accredited bodies “do not receive the full £2.50 rebate”, when the 50% arrangement is part of the franchise agreements with the CAA accepted by all accredited bodies.
The Trailfinders chief also takes exception to “the startling increase in . . . the audit and legal expenses which have risen from £56,520 in 2016 to £333,633 in 2022, nearly six times the cost”, arguing “the ATT accounts are simple and other than the lack of funds in the ATT to cover the risk, little seems to have changed”.
The audit and legal fees are up from £170,000 in 2020-21 and £146,000 in 2019-20, and there is no explanation as to why.
But in the context of the report revealing the trust fund held £139 million on the date it was published (July 12), this could be viewed as nitpicking.
Kelly makes no reference in his latest criticism of the CAA and the ATT to his suggestion early this month that “Our suspicion . . . is that the ATT no longer has the backing of the Treasury and as such is no longer a going concern.”
In fact, the ATT report confirms the backing of the Treasury, stating the government “will provide additional financial support to the ATT as necessary” and noting the “recent written assurance provided by the Secretary of State for Transport”.