11 Jun

ABTA sends a strong message to the CAA

ABTA has responded to the Civil Aviation Authority (CAA) consultation on increasing the ATOL passenger contribution (APC) levy with a call for an extension to the scope of the ATOL scheme to provide financial protection to more holidaymakers.

ABTA believes that the focus of the consultation should be widened to consider a proposal on simplifying and extending financial protection which has already been submitted by ABTA to both the CAA and the Government.  If the proposal were to be given the green light, any customer buying a flight plus accommodation would benefit from financial protection, not just those on package holidays. 

Recognising that some increase in the amount of the APC may be necessary as a result of recent failures, ABTA is also suggesting that it would be more appropriate to wait for a clearer indication of the real cost of the XL failure to determine the additional funds that need to be raised to build up the Air Travel Trust Fund.  Claimants have up until September 2009  - one year after the XL failure - to submit their claim forms and ABTA believes that the CAA should delay any increase in the APC until the actual cost of the XL failure is known.

Commenting on the consultation, Mark Tanzer said: “This consultation process is a much-needed opportunity for the trade to make its views known and we would urge both CAA and the Government to simplify and widen consumer protection. This would benefit both the industry and their customers for whom the present system is confusing and full of holes.”

In response to the CAA Consultation, ABTA has proposed to widen the scope of financial protection, the key points of which are:

  1. The ATOL scheme should include:
    a. All sales of flights plus other services whether or not they are classed as package holidays.
    b. Sales by all travel companies and not just principals/tour operators. These should include retail agents (under an “Agents’ ATOL”), principals (as at present) and airlines. For airlines to be included, the Civil Aviation Act would need to be revised. This is scheduled for 2011.
    Any company selling a flight plus other services will be a licence holder unless they are an agent selling traditional package holidays organised by other companies who have their own licence.
  2. Provision of security
    a. Security to be provided by the licence holder whether agent, principal or package organiser

    b. Security to be provided by mix of levy, bonding and other acceptable means

    c. The cost of security must be at a level acceptable to the participants in the scheme
  3. Protection mechanism
    a. If a customer pays for a flight and accommodation, he/she will be within the ATOL scheme.

    b. In the event of the failure of any of the service suppliers:
    i) The ATOL holder, whether acting as agent or principal, will be responsible to refund all the customer’s money (not just the money for the individual service) or to re-protect with other suppliers.
    ii) Where the ATOL holder is acting as agent, they will be able to submit claims to the ATOL scheme where the flight supplier is, itself, an ATOL holder.

    c. In the event of the failure of the ATOL holder acting as principal, the customer will be refunded or repatriated by the ATOL scheme.

    d. In the event of the failure of the ATOL holder acting as agent, the customer will have the benefit of enforceable contracts with the service suppliers and so no refund should be necessary. Where such contracts cannot be enforced because eg, the supplier itself has failed, the customer will be refunded or repatriated by the ATOL scheme.