The CAA has confirmed the Air Travel Trust (ATT) fund still has "cash in the bank".
According to notes attached to the organisation’s 2018/2019 accounts (to 31 March 2019), published today, at the time of signing (13 November 2020), the trust’s resources primarily include £35 million of cash reserves and £75 million of commercial borrowing facilities.
At the end of the accounting period (to 31 March 2019), the ATT’s net assets were £221 million, £211 million of which was cash. However, since then the Thomas Cook collapse has occurred, which including repatriation and refunds is expected to cost the ATT £250 million net of proceeds from the insurance policy, and this has been funded from existing cash resources. The insurance policy expired in March 2020 and was not renewed due to "unavailable capacity in the insurance market".
The report notes said since the balance sheet date and up to 10 November 2020, 28 Atol-holders have failed – 21 since the start of the Covid pandemic. The cost to the ATT of these 28 failures is expected to be about £33 million.
The trustees added their belief that should the remaining resources be insufficient to meet the demands of the ATT, they expect the government will provide additional financial support to the ATT if necessary.
The expectation of potential governmental intervention, the report said, is based on support provided to the ATT "over many years", recent written assurance from the transport secretary and the trustees’ view as to the obligations on the UK to "implement the Package Travel Directive effectively".
The commercial borrowing facilities expire in May 2021, but the trust anticipate renewing.
Since the onset of Covid, APC income (the £2.50 per passenger) has been around one-third of recent years.
The report added that "having taken relevant factors into account" the trustees have concluded that the ATT "has adequate resources available to continue in operational existence for the foreseeable future, being not less than 12 months from the date of this annual report and accounts, and it is appropriate to adopt the going concern basis for their preparation".