5 Things You Need to Know About ATOL Before You Get Started

For UK travel businesses, understanding the intricacies of the Air Travel Organiser’s Licence (ATOL) is crucial. Even if your business does not need an licence, understanding when it might and how it works is still important. ATOL not only provides needed confidence in customers but also ensures compliance with regulations, the fostering of trust, and financial protection. But, when it comes to starting up a new business as a travel expert, or simply considering the necessity as a long-running business, what are the most important things you need to know about ATOL?

1. What is ATOL, and Why Does it Matter?

ATOL, or the Air Travel Organiser’s Licence, is a financial protection scheme managed by the Civil Aviation Authority (CAA) in partnership with the Air Travel Trust (ATT). It is designed to protect travellers from financial loss in the event of the insolvency of a travel business.  

In the event that a passenger has booked a package holiday (and on rare occasions, a solo flight) that includes flights, and there has been failure, the ATOL scheme is used to reimburse that traveller in the event that the travel business cannot due to insolvency.  

For travel businesses in the UK, this licence could be a legal requirement in order to run their business and sell holidays to customers.

2. Who Needs A Licence?

 If your business sells flights or package holidays including flights and accommodation, you are likely required by the Package Travel Regulations to hold a licence. This applies to a wide range of businesses, including travel agencies, tour operators, and online travel retailers. Ensuring that your business falls under the appropriate ATOL category is essential for compliance. 

It is vital that you consult an expert concerning whether you require an ATOL for your business, as some travel agents selling premade packages that include flights will not need one, but they will need to be selling packages from a business that does have an ATOL.  

If you are uncertain whether you need a licence or not to begin or continue selling and you’re looking for a simple support solution, don’t hesitate to get in touch with the friendly in-house experts at Protected Trust Services (PTS) to see what they can do for you.  

3. What is the Application Process Like?

The application process involves several steps. You’ll need to submit a detailed application to the CAA, demonstrating that your business meets the necessary financial criteria and has the infrastructure to provide customer protection. Understanding the application requirements and deadlines is vital for a smooth and successful ATOL application. Detailed requirements for each type of licence can be found on the CAA website.  

Alternatively, you can apply through a trusted ATOL Franchisee like PTS. As members of PTS, travel businesses that need an ATOL can go through a much simpler application process through the PTS Franchise ATOL, reducing checks and allowing PTS’s verified status to take on most of the stress for you. And if a PTS member requires an individual ATOL for any reason, our in-house experts help to make the application as smooth as possible.

4. What are the Financial Requirements?

Just like with all travel businesses operating under the Package Travel Regulations, ATOL holders are required to meet specific financial protection criteria to ensure they can cover potential liabilities in case of business failure (it is important to remember that the ATT fund is a last resort for travellers, in the case of their holiday going array, the travel business is primarily responsible for compensation outside of complete business failure).  

This involves submitting regular financial reports to the CAA and maintaining adequate financial resources, alongside using an approved financial protection method. It is for this reason that PTS has become such a great option for members looking to acquire an ATOL. As a Franchisee, the PTS travel trust account system is verified a trusted financial protection solution, and therefore members do not have to worry about checks.

5. Are There Different Types of ATOL?

Depending on how your business works, there are 4 different types of ATOL that could meet your requirements. Though we have discussed a Standard ATOL and a Franchise ATOL here, as the most commonly acquired, if you meet certain requirements you may need a Small Business ATOL or an ATOL to ATOL license. You could also work under an Accredited Body and use their licence, such as if you are a homeworker.  

Which licence you have does not affect the workings of your travel business, but one may be required depending on how many flights you sell and to whom you are selling them. 

So, if you would like to learn about how your consumers’ monies are protected with Protected Trust Services (PTS) and how we support excellent travel businesses, check out our pages. Or you can contact the lovely PTS team by calling 0207 190 9988 or emailing us at ask@protectedtrustservices.com.