The Civil Aviation Authority (CAA) has published a consultation document on the future level of the ATOL Protection Contribution (APC) paid by tour operators to protect holidaymakers.
Proposals for an increase from the current level of £1 per passenger are intended to ensure that the ATOL Scheme continues to provide effective financial protection for holidaymakers. The proposals include setting the rate paid by tour operators at £3 per passenger from 1 October 2009, which offers a reasonable balance between setting the rate as low as possible while providing resilience in the current period of economic uncertainty.
The fall in air passenger numbers and the failure of XL have brought about the need for changes to the rate of APC. Previous industry bookings estimates, on which the current APC rate was based, are forecast to drop significantly as a result of the recession, directly affecting the income of the Air Travel Trust Fund (ATTF). In addition, the failure of XL, which was the UK’s third largest tour operator when it collapsed in September 2008, has affected forecasts of ATTF expenditure.
Commenting on the launch of the consultation, Richard Jackson, Director of Consumer Protection for the CAA, said: “ATOL offers consumers peace of mind and comprehensive protection. It is therefore in the interests of holidaymakers that the CAA takes action to strengthen the ATOL Scheme so it has the resilience to meet the challenges that face the travel industry and to continue to protect people during the current economic downturn. We are also pleased that the Government has given some initial thought to what options may be considered to further clarify protection for consumers."