Responding to the Department for Transport (DfT) and the CAA’s latest consultation on making Atols compliant with the Package Travel Directive (PTD), Aito said the industry had been put in the “crazy situation” where it had been asked to respond simultaneously to three consultations.

TTG was this week given an exclusive early glimpse of Aito’s response, in which chairman Derek Moore said the association shared Abta’s concerns the CAA was legislating beyond the requirements of PTD in trying to future-proof the Atol scheme.

“Aito members are more blunt [than Abta’s],” said Moore. “We are the people who actually have to work with what the government dumps on us. We are impassioned and, in some cases, plain angry.”

Moore said Aito had two main objections to the proposed new Atol regulations.

Firstly, the CAA’s attempts to “gold plate” the legislation, which he said put UK operators at a disadvantage compared with those in Europe: “We could do without our own government legislating against us,” he said.

Both Abta and the Association of Atol Companies (AAC) have this week welcomed the CAA’s efforts to beef up Atol, but called for these changes to be deferred until after July 1 to allow further consultation with members.

Abta added the implementation of PTD must be the “overriding and immediate priority” for regulators and the industry ahead of the implementation deadline.

Aito’s second contention is that the CAA’s new terms and regulations fail to address “third country traders” – companies selling into the EU from outside – and the intermediaries helping them operate in the UK while remaining outside the new Atol regulations.

“Even more galling, it is not protecting the UK consumer either,” added Moore. “[It is] a double whammy of misguided action by an official body which implements law on behalf of the DfT.”

Aito has called for this loophole to be closed and a provision inserted in the new Atol regulations covering how intermediaries - acting through holiday fairs, consumer publications and online - will be made liable if they refuse to co-operate when they assist third country traders selling in the UK unlawfully.

“The new ATOL regulations offer an opportunity to sort this problem; it must be seized to clarify the matter beyond doubt so legal penalties apply across the board,” said Aito.

The CAA said there would be a transitional period after July 1.