ATIPAC welcomes proposed reform of ATOL

In its ninth Annual Report, published today, the Committee highlights the importance of this reform and the benefits it will bring to consumers and industry.

John Cox, Chairman of ATIPAC, said: “The Committee has a long standing concern over the confusion experienced by consumers over their financial protection arrangements when booking an air holiday. Too many consumers do not realise that in some cases their holiday arrangements are unprotected and often only realise the fact when they are abroad and have a problem. This issue has been evidenced in recent travel failures, where customers are separately contracted for their flights and accommodation, and the failure of one of the suppliers has the potential to leave consumers out of pocket by thousands of pounds.

“The reform proposals are a real chance to address this issue. Expanding the scope of ATOL so that all flights sold with another holiday component, such as accommodation or car hire, (known as ‘flight plus’) will help to end the current confusion. The Committee urges all parties, the Government, the travel industry and the CAA to work together to ensure the reform proposals go ahead for the benefit of both consumers and industry.”

The report also examines the challenges faced by the travel industry over the last year and notes that the 46 ATOL holders who ceased trading over the year represent a considerable increase on previous years. There is also an examination of the effects of the increase in the APC rate.

John Cox said: “The difficult economic conditions have put real pressure on the travel industry and inevitably some companies have failed to survive, with the most obvious example being the collapse of XL in September 2008. In all cases customers abroad, who had booked with an ATOL holder, were repatriated at no additional cost and those yet to travel are being refunded. Regrettably those that were not financially protected by ATOL have found themselves out of pocket.”

Commenting on the increase in the APC rate he said: “An increase so soon after it was introduced is unfortunate and will undoubtedly lead to an increase in the costs of financial protection for the largest tour operators and medium sized and smaller operators are likely to see their costs return to pre- APC levels. However, following the economic downturn and the failure of XL it is vital that the Air Travel Trust is returned to a sustainable balance and that air travellers are properly financially protected.”
 

(c) Centre for Asia Pacific Aviation. Date posted: 22-Jul-09