Concern has been voiced by the Air Travel Insolvency Protection Advisory Committee (ATIPAC) that the Government had not accepted Civil Aviation Authority advice on extending financial protection to all air travellers flying from the UK on international flights by introducing a £1 passenger charge on air tickets.
In its sixth annual report, the Committee describes the current confusion surrounding the financial protection of air holidays as `profoundly worrying`.
John Cox, Chairman of ATIPAC, said: "The Committee endorsed the CAA`s work on extending financial protection to all air travellers and finds it hard to comprehend that the Government missed such a golden opportunity to provide
real clarity and protection to consumers. The failure of the Government to take action last Autumn, coupled with a further decline in the coverage of the ATOL system, is leading to a feeling within the industry that the `wild west` is in the process of taking over."
"Some tour operators are now reorganising their businesses to avoid the ATOL regulations and leaving their customers without financial protection. This is profoundly worrying. The confusion that surrounds financial protection
is only getting worse, with many consumers assuming they are covered, when in fact they are not."
Following its decision not to pursue protection for all flights, the Government asked the CAA to consult with industry as to whether a passenger charge might be introduced to replace the current ATOL bonding system, as it would be a less onerous means of meeting ATOL holders` financial protection obligations to consumers. In April the CAA issued a consultation document which considered the feasibility of replacing bonding with a £1 charge in respect of booking ATOL flights or packages.
John Cox said: "The Committee urges the Government to respond immediately to the results of the CAA`s latest consultation on reforming ATOL bonding. Action should be taken quickly to ease the financial burden on tour operators and ensure that a clear message about protection can be communicated to the public as soon as possible."
The Civil Aviation Bill, which includes powers to replenish the Air Travel Trust Fund, is expected to gain Royal Assent later this year. This would enable, subject to secondary implementing legislation, the introduction of a
per passenger protection charge. The Committee welcomes this development as the long overdue first step to place the fund and protection arrangements on a firmer footing although it still does not address the wider issue of comprehensive protection.