The Air Travel Trust (ATT) fund has reported a record surplus despite the collapse of Monarch last October.
In its annual report, issued on Wednesday (July 18), the ATT revealed the fund had accrued a surplus of £170 million in the year to March 31, up from £145 million the previous year.
This was despite the Monarch failure, which triggered the largest repatriation of UK air passengers in history.
Income from Atol protection contributions totalled just shy of £60 million, up around £700,000 on 2017.
The report reveals the process dented the fund to the tune of £16 million, “without doubt the financial year’s most significant event” said the ATT.
In total, around 110,000 Monarch passengers were affected, although only a small proportion were protected under the Atol scheme through Monarch Holidays Ltd and Avro Ltd bookings, as well as a limited number of seat-only sales sold through First Aviation Ltd, the Monarch Group’s third Atol protected operator.
The government stepped in to assist the repatriation, at what is believed to have been a cost of £60 million to the taxpayer.
The report says government intervention was necessary “primarily because available spare capacity... would have been insufficient to satisfy the surge in demand.”
Around 80% of Monarch passengers had submitted refund claims by the end of the year, which have been paid.
Over the past year, nine Atol holders failed, the next most significant after Monarch being Chadwell Travel, trading as A1 Travel.
A1 predominantly sold flight-plus bookings, which were brought under the Atol scheme in 2012 and are now packages under the new Package Travel Regulations.
As a result, most passengers were Atol protected. The trust drafted in Broadway Travel to re-arrange many holidays, saving the ATT providing refunds in many cases.
The failure though is still expected to cost the fund around £4.5 million, while the total burden on the fund in the year to March 31 was £21.3 million.
ATT chairman Michael Medlicott, writing to transport secretary Chris Grayling upon release of the report, said he was “glad” the trust was able to play a significant role in the Monarch repatriation - but warned the government’s intervention “raised important policy questions concerning the wholesale repatriation of non-Atol protected passengers.
“The trust has paid its ‘fair share’ of the cost of that operation and in that sense, trustees’ obligations under the trust deed have been met,” he said.
“But it is also true the CAA’s expert resources, built up over the years and largely funded by the trust, have been used for the benefit of non-Atol passengers.
“In that context, trustees fully support your decision to launch the independent Airline Insolvency Review, and trust that its recommendations will lead to a more satisfactory framework for the benefit of both the government and consumers.”
Looking ahead, Medlicott added: “The new Atol regulations [and] implementing the relevant aspects of the Package Travel Directive in the UK will being new challenges in the years ahead.
“The key challenge for the trust will be extending the boundaries of protection beyond the UK’s borders.”