International Passenger Protection (IPP) said a failure by the trade to engage with the consultation could result in them being lumped with security requirements that do no suit their business models.
“The Atol reform touches on the old funding model, along with trust accounts in the main, but loosely refers to a ‘financial markets’ option," said IPP managing director Paul Mclean.
"However, in our opinion, the CAA should be giving Atol holders the same security options as the Package Travel Directive – bonds and/or guarantees, trust accounts or insurance. This is probably the last opportunity for the trade to ensure they have three options in line with the Package Travel Directive."
The CAA has extended its consultation on reforms to the Atol regime by just over two weeks, from an initial 30 July deadline to 15 August. The trade has already raised concerns over the CAA’s proposals, warning they risk creating an "unfair playing field".
Mclean said IPP had long been in favour of reforming protections for the trade. "Travel funds are, in our opinion, one of those outdated systems historically exposed to large collapses and ever-increasing contribution costs," he said.
"No option will ever fit all. The travel trade is ever-changing and dynamic – some agents will prefer trust accounts, others will find themselves suited to providing bonds and guarantees or insurance solutions that track sales more precisely, charging on actual turnover with a built-in repatriation service, which makes a fairer option especially during such events as Covid when sales are down hugely."
Mclean added IPP has put forward an insurance solution to the CAA, and stressed the importance agents "grab this last opportunity".
Trust accounts
Speaking at last week’s Aito general meeting, Matt Purser, director at the Travel Trade Consultancy, made a similar plea to members not to "stay silent" on the CAA’s proposed Atol reforms.
Purser said the reforms could see agents compelled to use trust accounts to secure customer payments, adding silence on the issue would be "deemed to be acceptance" by the CAA.
“The more people respond, the better it will be,” said Purser. “My fear, having dealt with renewals in March and coming up to September renewals, is that trust accounts are already being made a condition, even though we are still in a consultation period at the moment.”
