BUSINESS NEWS
The CAA is seeking to end travel companies’ use of customer monies ‘as a source of low-cost financing’
CAA proposes to restrict use of customer money
Regulator acknowledges the industry ‘may require time to adjust’. By Ian Taylor However, the consultation is
The CAA’s long-awaited consultation on Atol reform, launched last week, seeks industry views on proposals that would fundamentally change the way many Atol-holders fund their operations. The proposals are far-reaching.
The CAA not only intends to limit the use of customer money for advance payment of suppliers, which may require Atol-holders “to re-evaluate their capital structure”, but also aims to introduce “risk pricing” through variable rates of Atol Protection Contribution (APC) on bookings.
40 6 MAY 2021
also limited. The proposals exclude wider reform and the CAA makes clear it’s “looking at changes which the CAA is able to make through its own regulatory powers”. So changes requiring legislation are ruled out. The CAA insists no decisions
have been made and there will be a follow-up consultation early next year on specific proposals in light of industry responses. Yet it does propose changes to
agency agreements and to the way small Atol-holders pay APC returns
with no further industry consultation. The CAA highlights “two principal
problems”, arguing: “Many travel businesses are highly reliant on customer money as a source of working capital and not strongly capitalised enough in their own right; and the APC they incur may not [reflect] the risk individual Atol-holders, or the value of bookings, pose. “Issues arise when [customer]
money is used to fund other business Continued on page 38
travelweekly.co.uk
BUSINESSNEWS
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