The travel industry will have to wait until the “back end” of the summer to find out exactly how the CAA plans to change the Atol scheme, the scheme’s boss has warned. 

Last month, the CAA revealed the findings of its initial consultation, which revealed support for a variable Atol Protection Contribution. There was less support, though, for the authority’s suggestion the trade use trust accounts to ring-fence customer cash before they travel. 

Michael Budge, the CAA’s head of Atol, insisted “no decision” had been made on changes to the scheme during an Agenda 2022 interview with TTG editor Sophie Griffiths, which took place before the CAA published its findings. 

“We haven’t made up our minds yet,” said Budge. “It’s absolutely not the case that we have a pre-determined view. We’re open to looking at various different options.” 

Budge stressed whatever the final proposals for Atol reform, the CAA wanted to “engage with the industry” and would listen to its views, with a second consultation expected to be launched later this year.

AIRLINE INSOLVENCY 

At the time of the first consultation, many in the industry called for Atol reform to be linked to a proposed airline insolvency bill to ensure a “level playing field” between Atol holders and other travel companies. This legislation would change the way airline failures are dealt with following the collapse of Monarch in 2017 and Thomas Cook in 2019. 

“It’s clear the government sees this as an area of priority, but over the last two years they have been focusing on efforts elsewhere,” said Budge. “It’s up to the government to [decide] what options they want to take forward.”

The future of the airline insolvency bill is still unclear and did not feature in the nearly 40 bills mentioned during the Queen’s Speech on 10 May. Budge said the Atol brand had not been damaged by the government’s decisions to repatriate all Monarch and Thomas Cook customers, whether they were covered by the Atol scheme or not.

“Atol protection is really important and gives consumers confidence their money is safe,” he said. “The Atol badge is not just about repatriation.”

He added any decision by government to continue repatriating all customers of failed airlines “would not weaken” the Atol brand, as it also provided refunds for forward bookings and in resort support to affected holidaymakers, creating more confidence for consumers. 

INDUSTRY RESILIENCE

Budge also paid tribute to travel’s “resilience” during the pandemic, admitting he was surprised at the relatively low number of insolvencies among Atol holders. “The industry has proved itself resilient time and time again,” he said. “That’s testament to people operating in the industry. 

“We were surprised there were not more failures, but that goes to the heart of how businesses chose to respond to the circumstances. We did see failures, but not to the degree we would have expected at the start of the pandemic.” 

Budge added the 88% renewal rate for Atol holders in March was not “symptomatic of a bigger problem” in the industry. “Some licences were no longer required and some businesses consolidated or decided to move away from Atol,” he said. 

Budge also said it was “important” agents reminded clients holding refund credit notes to use them before they lose their financial protection at the end of September.