Reversed roles

A look back at 12 months ago provides more evidence that Jet2 is on the up and Thomas Cook in retreat. A year ago, Jet2 increased its authorised passenger numbers by almost 32% while Thomas Cook Tour Operations slashed its own Atol authorisation by almost 23% from 3.9 million to 3 million, with Egypt and Tunisia being withdrawn from its range of destinations. The latest cut takes it perilously close to dropping to third place, while Jet2 has added 687,000 seats to its licence in the past 12 months, helping it move from fourth up to third in the list of top Atol holders.

Tui meanwhile has increased its Atol by a healthy 573,000 seats in the same period, taking the number of passengers it is licensed to carry up to 5.3 million, meaning that its top spot could not be challenged even if its two biggest competitors merged.

The other big adjustment among the major players is First Aviation (Monarch). Now it has its bill of financial health following a cash injection last October, the CAA no longer insists that its scheduled airline sales are covered by Atol, so a licence that last year protected 2.2 million sales now covers only 885,000.

This has prompted Monarch to fall from third place in the table to seventh, but the removal of the Atol requirement for seat-only sales is a positive sign for the brand. Underlining this, the airline revealed last week that it would add 430,000 seats to its winter 2017-18 range of scheduled flights.

Expedia, On the Beach and the direct-sell British Airways Holidays all move up one place to fourth, fifth and sixth positions respectively in the top 10, compared with 2016.

Southall Travel, last year’s 10th biggest licence holder, has dropped one place out of the top 10 – its position taken by Virgin Holidays, which recently claimed that cutting out third-party agents had helped it towards a 75% rise in profits in 2016.

As last year, however, the brand that seems to have taken the industry by surprise is loveholidays.com, in eighth place. The March 2016 table showed it had leapt from 23rd place to ninth position, with a licence for 400,000. This year, it has added another 231,000 to its Atol and moved up to eighth place.

Size guide for brands

Atol holders renew licences in March or September, with the biggest brands tending to renew in the autumn. The CAA also regularly updates information about the number of passengers an Atol-holder is licensed to carry as companies adjust numbers according to forecasts, so these new figures are the most accurate guide to the size of travel brands available.

Typically, just under half of the top 50 companies renew their licences in March and the latest renewal brings the total number of Atol-protected packages to 27.1 million, an increase of 807,000 on the same point last year.

Alan Bowen, legal adviser to the Association of Atol Companies, said he expected the proportion of Atol-protected companies to carry on increasing.

“In the last couple of years, a lot of people have sought surety and agents are realising that as there is no commission from the airlines it makes sense to sell a package.”

This, he added, explained the rise of brands such as loveholidays.com, a name that “did not exist five years ago”. Bowen said the number of protected travel purchases would increase “even more” next year when new rules covering linked travel arrangements are introduced under the revised Package Travel Directive.

Last summer’s high-profile collapse of the Lowcosttravelgroup had brought home the message to many consumers that financial protection was important, he said.

“I suspect the number of packages will continue to rise,” Bowen added.

Number of passengers: Atol 2017 Top 50