Abta boss expects upcoming bond renewals to be ‘easier’

The Abta bond-renewal process this month should be “easier” than in September as “the landscape is more positive”, according to Abta chief executive Mark Tanzer.

However, the benefits of any easing of the process of securing financial arrangements compared with six months ago could be negated by increased bonding requirements for some businesses given the volume of refund credit notes (RCNs) needing financial protection.

Tanzer conceded: “The September deals were difficult. There was no sign of when the market was going to pick up at that point and financial providers were saying, ‘Where is the end of this?’”

Speaking on a Travel Weekly webcast, he said: “What is different with the March renewals is that there is good news about the vaccines, there is the [government] roadmap and the [Global Travel] Taskforce. That gives more comfort to financial providers that they will see businesses through this period.

“The landscape is more positive in terms of having a summer season and people starting to get bookings for the summer. Cash is starting to come in and people are happy to rebook.”

Tanzer argued: “We’re very aware, as the CAA is aware, that we’ve had a year of not trading.”

But he added: “Our focus is on protecting customers’ money. That is what our bonding programme is there to do, to maintain customer confidence and comply with the law.

“We have very close dialogue with all our members about how much customer money is at risk and likely progression of risk over the coming months. Not everyone is in the same position. A lot of companies have paid refunds [to customers] so the bonding level may not increase. But if people have a build-up of refund credit notes outstanding, then the bond will increase to reflect that.”

However, he insisted: “The availability of bonding is easier now than it was six months ago because of the change in the landscape.”

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