P14-15 News mar6 4/3/09 14:41 Page 15
ttglive.com
Atols news
Comment
The APC scheme has set
up barriers to start-ups
The Atol Protection Contribution scheme is flawed and has
served to cement the big two’s duopoly, says Chris Photi
A
year into its implementation, the of more than of £320 million? No, the biggest
Atol Protection Contribution scheme issue is the barriers to entry this scheme has
has, just as I predicted, proved to be caused to the entrepreneurs of tomorrow, in
seriously flawed. what should be a free-market economy.
It is little wonder that the CAA will shortly go The government and the CAA, through APC,
to industry consultation with a view to increasing have facilitated a structure where the strong
the contribution in October. But these consulta- get stronger, either through acquisition or by
tions are nothing more than a sop to the indus- seeing smaller entities culled.
try under the guise of “political transparency”. Why? Because the CAA retains the right to
A £1 levy was never going to work, despite require bonding that is no longer available from
the expensive business modelling of City banks or insurance companies.
spreadsheet jockeys. The CAA’s implementation of APC destroyed
It was an easy number as a first-stage sell to this market and yet, incredibly, the CAA still
the industry which, led by the same old faces requires struggling smaller operators and
at the same old associations and consortia, all new applicants for the first four years of
charged lemming-like into this mess. existence to provide bonds.
Not unreasonably, the big two have expressed Where do they get them from? Even Small
their disdain for a rise in the levy. They, of course, Business Atol-holders are required to put up a
have the largest voice, as they provide minimum £40,000 bond.
more than 50% of the Air Travel Let’s not forget: these Atols were set up at
Trust Fund’s levy income each year. government bidding to enable start-ups and
But the fact is, however they small businesses to hold a licence at minimal
rationalise their position, that this cost. What a joke.
scheme is slowly but surely cementing But the biggest joke is that the
their position in a marketplace trade associations and agency
as an unbreakable duopoly. consortia which allowed this
The levy statistics alone to happen have now set up a
underscore this. working party to review APC.
And in addition, when Among this group are the
implemented last year, same people that backed
APC allowed the big two APC, which resulted in
to use previously commit- this unfair and iniquitous
ted bonding and funding position being established.
resources to go on a mad Whatever happened to the
acquisition trail. concept of a free-market
Since then they have economy, something this
acquired, and continue to country has a proud history
acquire, many successful fighting to defend?
and profitable companies. Plainly, this is something that
So, is the biggest issue has been lost on a government, and
really that an increase in APC its agency, that regulate by stealth
would result in an additional and in an unfair manner.
£5 million annual contribution
for a large corporation that ■ Chris Photi is senior director
recently reported annual profits of White Hart Associates
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