The Department for Transport (DfT) and the CAA both started four-week consultations on Friday (February 23), detailing proposals to change the Atol system so that it complies with the EU’s Package Travel Directive, which comes into force on July 1.

Among the proposed changes
are plans to expand the CAA’s enforcement powers to include “civil sanctions”, such as issuing fixed financial penalties and stop notices to companies breaching Atol regulations.

“We propose to bring forward separate legislation early in 2019 to introduce civil sanctions,” the DfT said in its consultation document. “Your feedback will help us to shape that legislation.”

The department acknowledged that the CAA’s current enforcement powers were “quite limited”, with the authority only able to launch a criminal prosecution, or revoke, suspend or amend a licence.

The CAA agreed that increasing its enforcement powers would “provide a more effective and proportionate way of tackling compliance issues”.

The proposed move to tighten up enforcement has been welcomed by Alan Bowen, legal advisor to the Association of Atol Companies. “Giving them more powers with stop notices saying you cannot trade and fixed penalty powers, that’s good,” said Bowen. “The honest part of the industry – the vast majority – would like this.”

His view was shared by Aito chairman Derek Moore, who said
the proposal could enable the CAA
 to “move more quickly” against companies breaching Atol regulations.

“For Aito, any move by the regulator to stop all these loopholes would be good,” ddded Moore.

“The more difficult it is for people to dodge the regulations, the better.”

The CAA also wants to make major changes to the Atol certificate by proposing an online certificate
to be issued through a new CAA system, rather than by an agent or operator. Other moves will see the “vast majority” of current Flight-Plus bookings becoming packages.

Linked Travel Arrangements, a new type of regulated holiday, will not be covered unless they include an Atol- protected flight-only booking.

The CAA has pledged to try to “minimise” the impact on the travel industry of the Atol changes.

David Bourne, head of Atol policy and governance, admitted there was “a fairly short turnaround for the consultation”, which ends on March 23. “We want to give people time to actually comply as much as possible once the regulations are laid,” he said.

However, there are concerns that the industry will not have enough time to adjust to the changes before PTD takes effect on July 1.

Alan Bowen added: “The number one concern is the timescale. We need to put in place new agency agreements, contracts with consumers, and lots of minor things.”