Ministers have so far reached out to the industry twice on suggestions for, or views on, proposed changes to the Atol scheme, which could include the introduction of a variable Atol Protection Contribution, currently fixed at £2.50 per passenger.
A further consultation is expected in the autumn, with the CAA’s head of Atol Michael Budge previously having signalled the changes would be introduced in time for the spring 2024 Atol renewal window.
“As new regulatory requirements are introduced and understood, it will be important to ensure the CAA has the right toolkit to enforce them,” said aviation minister Baroness Vere in an open letter to joint CAA chief executives Paul Smith and Robert Bishton on Monday (25 September).
Following the review, the watchdog could be handed stronger civil sanction powers, including provisions to impose financial penalties on holiday providers that don’t comply with the new rules. All flight-inclusive packages sold in the UK must carry Atol protection.
“I believe these powers would further protect customers, both within the current Atol framework, and as the scheme is reformed,” the minister added.
The government is yet to fully reveal the path it intends to purse for reform, although Budge has intimated the changes won’t be designed primarily to prevent travel companies from failing.
“The regulator is not looking to prevent failures,” Budge said during Abta’s Travel Law Seminar in May. “If you tried to set that as an objective, it would be a fool’s errand. There are insolvencies – they happen all the time.”
Budge also admitted there was no singular view throughout the industry of what Atol reform should achieve, particular with regards to segregation of consumer money before a trip.
Abta director of membership and financial protection Rachel Jordan said during the Barclays Travel Forum on 18 April that its members didn’t believe in a one-size-fits-all approach and wanted to see flexibility.
