Abta Travel Law Seminar 2023: CAA reform of the Atol scheme and a review of Continued from page 48
trust accounts. It doesn’t necessarily mean segregation will be costly. It doesn’t necessarily mean businesses can’t pay suppliers in advance [from segregated funds].” He added: “A number of
businesses tell us they already segregate [customer money] and are using the money for the reasons they received it. Other businesses tell us they can’t segregate customer money. This comes back to the resilience of a business. If you already segregate, your business is more resilient. If you don’t segregate, you’re depending on customer money to fund your business.” Budge confirmed April 2024
would be a “commence-from date, not a cut-off date” for the reform and said the length of the transition period “will depend on the extent of change”. He insisted: “No decisions have been made.” The Atol chief acknowledged
“a desire for alignment of the Package Travel Regulations [PTRs] and [government] Airline Insolvency Review came through loud and clear” in industry responses to the CAA’s ‘Request for further information’ on reform proposals, along with “harmonisation of the PTRs and Atol reform”. Budge said: “We continue
to have discussions with the Department for Transport, but airline insolvency is a matter for ministers. Atol reform is not looking to address the issues of the Airline Insolvency Review. We continue to engage with the Department for Business and Trade [which is reviewing the PTRs]. [But] this is not about how we align the regulations.”
Abta: Members against mandatory segregation
Abta has urged the CAA not to impose compulsory segregation of customer money on Atol holders, noting “the vast majority” of members do not segregate funds at present. Rachel Jordan, Abta director of
membership and financial protection, reported members’ feedback on the CAA’s latest Atol reform proposals, saying: “We’ve heard segregation is the CAA’s ‘preferred option’. Members have said, ‘Please don’t mandate segregation. That would be tricky.’” Speaking at the Abta Travel Law
Seminar in London, she insisted: “The vast majority [of members] do not segregate at the moment.” Jordan confirmed most Abta
members “are happy” with the CAA’s proposal to move from a £2.50 flat-rate Atol Protection Contribution (APC) on bookings to a variable rate. But she asked: “How will it work? What will it be based on? How will a business know from one year to the
CAA on feedback: It’s clear industry wants choice
The CAA received 289 industry responses to its ‘Request for further information’ on Atol Reform issued in January, almost as many as the record 305 responses to the initial consultation on Atol reform in 2021. CAA head of Atol Michael
Budge provided an initial summary of the responses when he spoke at the seminar last week, noting: “The
46 18 MAY 2023
next how much the APC will be?” She added: “There is concern
about transparency. The CAA is not saying it would disclose the level of APC, but if business A is selling the same product as business B at a substantially different price, it [the difference in APC] may be clear.” Jordan also raised concerns about
the impact of Atol holders switching to trust accounts to segregate funds. She noted “there may be costs [linked] to that”, and pointed out where Abta
held a bond on behalf of a business: “How would we know how much was in the trust? There would need to be monitoring and there would be costs and resource issues attached to that.” She said: “I’m not sure there
is any appetite at Abta to get into monitoring.” Jordan reported being told by
some businesses, ‘We have a trust account for the CAA, why not with Abta?’ and said: “It would be good to have one trust account for both. [But] the regulatory requirements for Atol and the PTRs are different.” She called for the Atol and package travel regulations to be aligned. Abta director of legal affairs
Simon Bunce agreed: “Trust arrangements under the PTRs are prescriptive.” Paula Macfarlane, Abta senior
Rachel Jordan
diversity of opinion remains.” He said: “It’s clear the industry
wants choice about how to provide financial security [and] there is a preference for an individual, risk-based approach. “Methods of segregation [of
customer money] are not fully understood and there was a lot of focus on the costs of that. “There is strong support
for a variable Atol Protection Contribution. The question is how that could be implemented.” Yet Budge also noted a desire for “a transparent and simple APC”. He noted: “There is no support
solicitor, said: “We want travellers protected without making it onerous for businesses. But we’re always looking at these things separately.”
for, and no availability of, a full insurance solution to replace the Atol scheme, but individual business have the option of insurance [to provide protection].” Budge added: “Operators, in
particular, believe protection of agency pipeline money is important.” He noted “a lot has been
said about the industry not understanding the objective of Atol reform” and explained: “We’re looking to improve the resilience of businesses across the sector. “We’re not looking to demand
greater financial strength from every business.”
travelweekly.co.uk
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52
