Calls for CAA to have greater powers to enable holidays after failures

The CAA should have greater powers to enable holidays to go ahead in the aftermath of a failure because consumers want holiday protection not financial protection.

That is according to industry entrepreneur Steve Endacott who told an Atol Reform round-table at the recent ITT Conference: “Booking a holiday is a trust item. People want to know that if something goes wrong they still go on holiday. They don’t want a refund.”

Travel Trade Consultancy director Matt Purser, who previously worked for the CAA, agreed. He said: “When I was at the CAA, when you phoned people [after an Atol failure] and said ‘Unfortunately you can’t go on holiday but you can get your money back’, that is not what they wanted. Going on the holiday is really important to people.”

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Purser suggested a guarantee that holidaymakers will travel would reduce the risk for all involved in financial protection, including insurers and merchant acquirers.

Endacott also insisted Atol reform must address the “elephant in the room” that large tour operators and airlines which have accumulated “debt mountains” pose the biggest risk to the system.

Endacott criticised the CAA’s record on regulating industry giants in light of the failures of XL Airways in 2008, Monarch in 2017 and Thomas Cook in 2019.

He conceded there was government pressure to mitigate the impact of a major company failure by keeping it trading, but claimed it was clear how much trouble XL, Monarch and Thomas Cook were in before they failed.

Endacott was a senior executive at MyTravel when the company came close to collapse in 2002 but was allowed to continue trading by the CAA. The group subsequently merged with Thomas Cook.

He argued: “The track record says the system doesn’t work because three times the Atol fund has been all but wiped out.”

Endacott insisted: “The elephant in the room is the airlines. Until the CAA gets regulatory authority over them [in respect of consumer financial protection], we can’t do anything about it.”

CAA director of consumers and markets Paul Smith noted airline insolvency reforms had been delayed by Covid but said: “The government has consulted recently on expanding our powers.”

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