Why the latest Atol reform ideas have industry experts split

The CAA’s Atol Reform consultation document recommends a hybrid financial protection model of ringfenced client money and bonds or other financial instruments. It also suggests the Atol Protection Contribution (APC) should be on a sliding scale from 50p to £15 depending on type of package, instead of the current £2.50 flat fee.

Aito director and Sunvil Holidays chair Noel Josephides said: “Full marks to the CAA because it is very detailed and a good basis for discussion. It has moved a great deal from the initial consultation and looked at everything far more realistically.

“I like the idea of a simple client account with a variable APC. Aito had a lot of discussions with the CAA, and they have listened.”

However, he said the CAA and the industry faced a broader issue. “The main problem is how they dovetail with Abta and what it’s doing vis a vis the Package Travel Regulations – will Abta still demand bonds? We have this ridiculous situation where we are governed by two separate lots of regulations. There’s a lack of lateral thinking about licensable and non-licensable turnover.”

Airlines were another issue, he said. “The CAA is allowing airlines to use customers’ money as they want – they take it from operators months in advance. The airline sector should be tied in.

“For me, the best solution was the £1 levy (on all flights, including scheduled services) suggested in 2005. 

“The EU will soon charge €7 to visit, so why not do an airline levy? It would bring in about £1 billion in five years. If it had been implemented, we would not have had the issues we had with Thomas Cook and Monarch. If it’s done across ferries, coaches, etc, it would lift the enormous burden on the Air Travel Trust Fund.”

Alan Bowen, legal advisor to the Association of Atol Companies said he was “somewhat disappointed”. 

Speaking in a personal capacity, he said: “We were really quite struck on the idea people would potentially pay a much higher level of APC.