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The CAA’s Air Travel Trust fund paid out £481 million in the wake of Thomas Cook’s collapse in September 2019
CAA reveals industry’s feedback on Atol reform
The trade rejects compulsory segregation of client payments. Ian Taylor reports In response, the CAA noted:
The industry came down heavily against mandatory segregation of customer money in the CAA’s Atol Reform consultation of April to June last year, describing the proposal as “overly complex” and “unworkable”. The consultation proposed
significant changes to the current Atol regime, limiting the use of customer money to make advance payments to suppliers and introducing ‘risk pricing’ through a variable rate of Atol Protection Contribution (APC). The CAA outlined a series of
options for protecting customer money, including use of trust or escrow accounts, a return to universal
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bonding or a combination of the two. Its summary of the industry’s 305 responses – a record number for a consultation – notes a “consensus that change is necessary”. But the industry came down firmly against a compulsory ‘one size fits all’ approach, including compulsory segregation of funds. The consultation proposed total
or partial segregation and not just via a trust account, but also use of escrow or a separate client account although this would require additional security. Partial segregation would allow removal of some funds from an account up to a limit set by the CAA. It gave as an example “up to 20%” of a holiday’s value.
“The majority of Atol holders and the travel industry do not believe the CAA should put in place mandatory segregation. Many considered the system to be overly complex, interventionist and unworkable.” It acknowledged concerns at “the
significant cost of pre-departure payments” and “around prepayments, especially to major airlines”. There was concern also at the
additional cost and administrative burden of trust accounts and that segregation would have “a negative
Continued on page 46
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