The CAA has confirmed it will not be offering extensions to companies renewing their Atol licences this month, despite teething problems with its new online renewals system.
The authority has also urged any Atol holders who have not yet submitted their applications to do so "without delay" ahead of the September 30 deadline.
Missing this deadline could have potentially dire financial consequences for smaller companies, who would no longer be able to sell holidays that fall under the Atol scheme.
"We do not intend to issue an extension to ATOL holders’ licences so encourage those who haven’t done so already to submit their applications now," said a CAA spokesperson.
The CAA said 950 out of 1,200 potential applicants had lodged renewals using the online system, introduced for the September round of renewals after a trial period earlier this year.
But concerns have been raised the new system is difficult to use and "currently not fully fit for purpose". This is affecting smaller Atol holders in particular, with one leading industry lawyer branding implementation of the new system "a complete disaster".
Some in the industry have urged the CAA not to penalise any companies whose applications are not completed by September 30 because of technical issues with the online system.
The CAA said in a statement: “As a responsible regulator, the CAA has a duty to ensure it has complete and accurate information before processing a renewal. Without this accurate information, there may well be a delay in the renewal process.
“If a new Atol is not granted before the current one expires, the business will no longer hold an Atol and will be unable to transact business which is legally required to be covered under Atol.”
The CAA added those companies that do not renew their Atols by the end of the month will have to stop taking licensable bookings and stop accepting payments for existing Atol bookings.
While most in the industry believe introducing an online system for Atol renewals is a good idea, many smaller Atol holders are having to provide significant amounts of extra information to the CAA than under the previous paper application procedure.
Chris Photi, head of travel and leisure at accountancy firm White Hart Associates, said: “Bizarrely, the Atol portal process for larger licence holders (licensable turnover of more than £20m) is easier to complete than for smaller licence holders.
“Larger companies submit all their financial data separately by email direct to their CAA officer. The portal is designed to save CAA time and ultimately one hopes the industry costs going forward. The Atol licensing regime is now very expensive in all respects.”
Photi added it was “too early to say” if many Atol holders were likely to miss the September 30 deadline, with those submitting their applications this month most at risk.
“Companies are submitting applications as late as now,” he said. “If they then encounter IT glitches, it leaves little time to adjust. In fairness, CAA personnel are very prompt in addressing portal queries as far as we see.
“Basically, the industry will just have to get up to speed because in the long run, this will save time and effort – albeit at considerable initial additional time and effort.”