CAA Released A Summary Of ATOL Reform Responses

Today, on Wednesday the 25th of May 2022, the CAA released a summary of the ATOL Reform responses received a little over a year ago in April 2021.  

In April 2021, the CAA put into motion a consultation centred around an ATOL reform, focusing on two key themes in a move to improve the financial protection provided to package holiday consumers via the ATOL scheme. The ATOL Reform responses were collected soon after and have now been released in a summary.  

This comes in preparation for the second consultation that Michael Budge, the CAA head of ATOL, has promised will arise later this year, in 2022. 

The original consultation in April of 2021 proposed fundamental changes to the scheme, including the introduction of further financial support through trust account systems (you can find out more about what was proposed during the ATOL consultation in our article). Many of the ATOL Reform responses made publicly by those in the travel industry were debating the use of trust accounts for the ATOL scheme.  

These discussion points also included new requirements for handling consumer monies and moving away from a flat rate to a variable ATOL Protection Contribution (APC) on consumer bookings. The CAA stated that the consultation was “intended to improve the financial resilience of individual ATOL holders with better direct protection of consumers’ money.” 

In the summary of ATOL Reform responses that were released on the 25th of May, the CAA stated that there were “a wide range of views on the best option for how the ATOL framework should be reformed” but “a general consensus that change was necessary.”  

“There was a general consensus that a variable APC (ATOL Protection Contribution) would likely yield a fairer system – i.e. that less risky businesses would not be subsidising riskier ones.” 

As a result of no support from the Reform respondents, the CAA have now ruled out any restrictions on when consumers can pay their balance. They also noted that a majority of ATOL holders don’t believe that there should be a mandatory segregation of consumer monies put in place, contesting the further introduction of trust account usage.  

“One of the main concerns was around the significant cost of pre-departure payments (especially for more expensive trips), that should not be borne by the tour operator for the duration of the booking,” said the CAA. 

“There were also concerns around pre-payments, especially those to major airlines who, respondents stated, are generally not responsive in the cases where refunds are required.”  

In tandem with the release of the ATOL Reform responses, Michael Budge also said, “We would like to thank everybody who shared their views on the first consultation. 

“It is important that this is a direct conversation with the travel industry and our wider stakeholder community which will allow us to understand and take account of the views of stakeholders as part of our final decisions.” 

“The collapses of travel businesses such as Monarch and Thomas Cook, as well as the impact of the pandemic, highlighted the need to carefully consider the means by which travel businesses can better protect consumers’ money and the need to improve the financial resilience of ATOL holders.” 

So, if you’d like to learn more 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 get in touch with the lovely PTS team by calling 0207 190 9988 or emailing us at ask@protectedtrustservices.com.