The Department for Transport has written to the Civil Aviation Authority to say it has decided in principle to introduce the £1 levy from April 1, 2008.
In a letter to CAA chairman Sir Roy McNulty, parliamentary under secretary of state for transport Jim Fitzpatrick said: “Following careful consideration of the responses, along with the analysis and advice provided by the CAA, the Government has decided ‘in principle’ that a £1 ATOL Protection Contribution (APC) should be introduced from April 1, 2008.
“Subject to the decision being confirmed, the current arrangements whereby all ATOL holders are required to provide bonds will end from that date.”
The letter reveals the Government received 88 responses to the consultation, out of which 70 respondents favoured replacing bonding with the £1 APC, four were opposed to it, while 14 “did not address the question”. The Association of British Insurers was the main opponent to the introduction of APC.
Fitzpatrick said there was “practically no support” for a second option, which proposed retaining bonding with an additional levy.
The letter continued: “I am giving an ‘in principle’ decision now to allow ATOL holders to plan their business with more certainty, particularly those whose licence is to be renewed in September 2007. It should also allow more time for bond obligators to adjust to the new arrangements.”
By Lisa James
