Trailfinders founder Mike Gooley has pledged to “honour our financial guarantee in full”, branding the Atol scheme “flawed from its inception”.
Gooley, owner and executive chairman of the agency chain, said the scale of the coronavirus crisis “cannot absolve us from discharging our warranty”.
He said: “When I put this promise in place from our start-up in 1970, I could never possibly have envisaged the global shutdown of travel we are presently experiencing.
“However, the sheer scale of the crash cannot absolve us from discharging our warranty.”
He went on to say 36 airlines had “made calls on our pledge” over the years, predicting that “several more failures are waiting in the wings”.
Gooley said what had enabled Trailfinders to offer this guarantee was that Trailfinders adopted escrow accounting from the outset – whereby funds are held in trust while two or more parties complete a transaction.
“We have never regarded money paid to us for future travel as ours to spend on our general running expenses,” he said.
“I enshrined this into a formal trust account in 1993 and built up sufficient cash reserves to cover our travellers where they are not otherwise protected.”
He described Trailfinders as “almost alone in this”.
“Much of the industry relies on using these pipeline monies as a matter of course rather than capitalising sufficiently to be able to ride any downturn in their particular market,” he said.
“I have campaigned for years to successive governments to make escrow accounting mandatory. The simple silver bullet to reduce the constant stream of failures and the magnitude of the misery when they do.
“Even bookies are obliged to set aside all wagers until the result is known.
“The Atol scheme was flawed from its inception and asks the taxpayer and the better managed to pay for the stream of failures.”
He went on to describe Abta as a “spent force”.
“There are signs that this crisis has finally exposed the shortcomings of protecting the traveller,” concluded Gooley.