A new CAA consultation document, Atol Reform, published on Tuesday (24 January) asks whether the Atol Protection Contribution (APC) should reflect the amount of security in place to protect consumer money as well as the risk posed by the Atol holder.
The consultation also asks whether integrated airline groups should pay a different rate of APC and if the APC should be reduced if an Atol holder provides extra protection for their own risk of failure.
APC reform could also centre on factors including number of passengers, average cost and ratio of liabilities to assets.
The document said: “Using the three factors described above, the CAA is able to derive a variable rate APC for each Atol holder of around 50p to around £15pp per booking compared to a flat rate of £2.50 today.”
Changes to the current flat rate will require parliamentary legislation, but the CAA’s head of Atol Michael Budge said he thought there would be time before the next election to achieve this.
“There were a lot of responses from consumers in favour of a variable rate but what there was not was consistency about how it should be calculated,” he said.
CAA research among consumers expressed a clear preference for a differentiated charge, with only 16% saying it should be a flat rate. The majority preferred a percentage of the cost of the holiday rather than a rate based on the destination, financial risk, size of operator or a flat fee.
A levy of below £10 was considered “a bargain” by 57%, with 83% saying a £6 fee was also good value.
The CAA’s consumer research also highlighted how holidays were bought. It found 66% of bookings were made online and 15% in person. Another 10% were made by telephone and 7% with an app. Most bookings, 45%, were direct with operators, with 15% going to airlines, 14% to OTAs and 12% to travel agents.
Only 2% said they would book a non-Atol operator, with 58% saying they would definitely not book a company that had no Atol and 31% saying “probably not”.
