TRAVEL WEEKLY BUSINESS
compensation, protection and the PTD. IAN TAYLOR reports POLITICS: ABTA FEARS IMPACT OF ELECTION
PROTECTION: CAA DECIDES TO RETAIN SMALL BUSINESS ATOLS IN AMENDED FORM
The Civil Aviation Authority has confirmed it will retain the Small Business Atol (SBA) for small companies. CAA head of Atol Andy Cohen told the audience at the Travlaw Big Tent event in London last week: “The SBA will stay.” The CAA published plans to abolish the SBA and bring in financial monitoring for smaller Atol businesses last June, with figures showing the cost of failures among SBA holders outweighed payments to the Air Travel Trust. The changes were slated to begin from April. However, Travel Weekly reported early this year that the CAA would retain the SBA (Travel Weekly, January 2). The proposals triggered the greatest number of responses the CAA has seen to a consultation. Cohen said: “We had 170 responses – the most we’ve ever had – and about 100 were from SBA holders. We looked at it long and hard and have decided the SBA will stay, but not in its current form.” He told the Travlaw audience: “If you are genuinely a small business, you will be able to retain an SBA. However, we’ll be making sure genuine SBAs at the very least face a financial test based on solvency. Details on when and how will follow in due course.” SBA holders are licensed to carry up to
500 Atol-protected passengers a year. There are about 950 SBA holders, about half the number of firms holding Atols. Cohen declined to reveal the CAA’s
RIGHTS: AIR TRAVEL COMPENSATION RULES FACE REFORM
Ministers are aware of a boom in compensation claims by air passengers in the wake of recent legal rulings, a senior civil servant said. At the same time, there are renewed
prospects of Brussels revising EC Regulation 261 on Air Passenger Rights. Kate Jennings, head of aviation policy implementation at the Department for Transport (DfT), said: “We see the aim as reducing the costs of the current [compensation] regime.” Jennings was
Andy Cohen: ‘SBA holders will face new solvency test’
AND EU REFERENDUM Abta chief executive Mark Tanzer is concerned about the impact the general election could have on travel. Tanzer told the Travlaw audience: “A general
election saps consumer confidence in the short term.” He added: “A decisive result would help.” There is growing apprehension in business at the
prospect of a result which could mean a minority government and a second election – producing months of political uncertainty. However, Kate Jennings, head of aviation policy implementation at the Department for Transport, denied such uncertainty would hold up regulatory reform. She pointed out: “The [current government] coalition formed quickly in 2010. “There is consensus between Labour and
“We looked at it long and hard and decided the SBA will stay”
plans on other aspects of Atol reform, including a proposal to introduce a ‘licensed practitioner’ scheme for accountants filing Atol reports. He said: “We’re looking at this closely and have not made up our minds.” However, Travel Weekly understands the CAA will switch to an SBA scheme based on Atol revenue rather than number of bookings, with new financial criteria and monitoring. The authority will also delay reform until details of a revised Package Travel Directive are known.
The CAA will announce its decision on Atol reform next month.
responding to Travlaw senior partner Stephen Mason who declared some claims a scam “akin to whiplash claims”. Mason said: “We see a vast number of claims, clearly based on Huzar v Jet2 but also on Dawson v Thomson Airways, and it’s causing pain to airlines.” The rulings last June confirmed passengers could seek compensation for delays to flights up to six years ago, even when a delay was due to a technical problem that could compromise safety. “Does this incentivise claim management companies? It’s an issue ministers are aware of,” said Jennings. But she added:
Conservatives on some issues. For example, it makes sense to support the recommendations of the Airports Commission [and] we have a legal obligation on the Package Travel Directive.” CAA head of Atol Andy Cohen agreed, saying: “Unless Ukip [the UK Independence Party] is in power, I don’t see too big a difficulty [on the PTD].” Tanzer also expressed concern about the prospect of a referendum on Britain’s EU membership. “The EU is our biggest market and not to have a voice in shaping regulations is scary. A referendum is high-risk,” he said.
“While there is a negotiation, that is the focus of our attention.” Latvia took over the EU presidency in January and Jennings said: “The Latvian presidency has restarted the working groups on passenger rights. “The process is just kicking off and it’s likely that we’ll see trade-offs. However, there is broad agreement on the issues: ‘extraordinary events’, the length of delay (three hours or five hours), the level of compensation and [the issue of] connecting flights. “We’ll work with the CAA and consult with the industry when we get to that stage.”
22 January 2015 —
travelweekly.co.uk • 79
Mark Tanzer: ‘A general election saps confidence’
“The process is just kicking
off and it’s likely that we’ ll see trade-offs”
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