£1 levy introduced from today

The Civil Aviation Authority will introduce a £1 levy on all ATOL holiday bookings from today (April 1).

The ATOL Protection Contribution (APC) is being promoted by the authority as bringing “significant benefits” to licence holders through the simplification of the current protection scheme.

The reform of ATOL follows the Government’s decision last autumn to proceed with the introduction of the APC payable by licence holders to replenish the back-up Air Travel Trust Fund and replace bonding as the primary means of protecting holidaymakers.

The majority of the 2,500 ATOL holders no longer having to provide a bond to the CAA, while consumers retain the same financial protection offered under the ATOL scheme.

Key changes to ATOL protection arrangements:

a. The release of bonds held by most licence holders joining the APC scheme on April 1, as well as revised bond requirements and overtrading guarantees for new entrants;

b. Clearer information (in brochures, websites and sales documents) for customers purchasing ATOL-protected travel arrangements;

c. Minimum business system requirements for all licence holders to improve compliance;

d. The appointment of a compliance manager by each licence holder, whose initial role will be to oversee the smooth introduction of the new requirements.

e. A new online facility available for ATOL holders to report booking figures and the automated collection of APC payments.

The ATTF will also benefit from New banking arrangements with Barclays Commercial Bank, which include a five year revolving credit facility, and an insurance policy arranged with major insurance companies that will provide additional funds in the unlikely event of the failure of one of the largest licence holders, according to the CAA.

CAA consumer protection group director Richard Jackson said: “The introduction of the APC is the culmination of the CAA’s ATOL reform project.

“We are grateful for the support and hard work of the Government, industry and financial institutions to bring APC and the necessary supporting infrastructure into place, and we are pleased that we have achieved this in the planned timescale.

“The CAA now needs to bed in these new arrangements with the industry, and make sure licence holders understand the new licence conditions and the arrangements for the payment of the APC that will apply from April 1.”

by Phil Davies