Businesses renewing Atol licences or Abta bonds in March should begin preparing now because of ‘more scrutiny’ in the process, say industry experts.
Martin Alcock, director of the Travel Trade Consultancy, insisted: “It takes a lot more time to get all the information together so start early.
“There is so much extra information asked for by Abta and the CAA.”
Alcock told Abta’s recent Travel Regulations Conference: “There is greater scrutiny of everything and everything takes much longer. We see far more scrutiny from the regulators, insurers and auditors.”
He advised: “Be all over the numbers. The more confidence you can give to stakeholders the better.”
Julie Jones, development director at Travel & General Insurance Services, said: “Insurers are looking for as much certainty as they can have. Where there is debt, make clear how it is structured.
She urged: “Provide the most information you can to your insurer.”
Rachel Jordan, Abta director for membership and financial protection, said: “In the past, people have waited [to renew] because they thought things would become clearer. We strongly encourage people to start early. We’re looking at renewals now.”
Flight Centre solicitor Jesse Braid said the CAA’s Atol reform proposals could prove unworkable.
He told the Abta Regulations Conference: “The CAA consultation does not mention Iata or the BSP [Billing and Settlement Plan] and these are fundamental. Iata rules say any money for Iata airlines needs to be held in trust.”
That means Iata agents have to hold consumer payments for flights in trust for the airline, when the CAA’s proposed reforms could require payments be held in trust for the consumer.
Braid said: “If any airline goes bust, the administrator would access those funds.”
He warned the insolvency of a major airline “would put the entire industry at risk” and insisted: “This reform needs to focus on travel providers, in particular airlines. Any reform needs to be of the whole industry.”
Alcock noted consumer payments “flow through the supply chain but when anything goes wrong everyone wants the security of holding an amount”.
Deloitte Legal partner Farina Azam reported that, at the last Atol renewal: “We had clients asked to put cash into their business. People were also asked to give personal guarantees. Merchant acquirers were asking for security. The [CAA’s] Atol reform does help with that.”
She suggested: “If the industry is going down the trust route anyway, you may as well [set up a trust].”