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ATOL failures nearly doubled
Nearly twice as many ATOL companies failed in the year to March 31 compared with the previous year, according to the 2006 Report and Accounts of the Air Travel Trust.
A total of 25 ATOL companies failed in the year, 11 more than in 2005 and the highest level for the past 10 years.
Eleven failures involved a call on the Trust causing expenditure of £4,643,000, an increase of more than £4 million over the previous year.
The Trust has no income and interest charges were £602,000. The year-end deficit increased to almost £16 million.
The Civil Aviation Bill, which includes powers to replenish the Air Travel Trust Fund, is expected to gain Royal Assent later this year.
In April, the Civil Aviation Authority issued a consultation document proposing that bonding be replaced with a £1 per passenger ‘Consumer Protection Charge’.
Even if the CPC does not replace bonding, it is expected that a level to replenish the AT will be introduced on all bookings taken after September 2007.
In a letter to the Secretary of State today, Air Travel Trust chairman Roger Mountford said: “The Trust has been in deficit since 1996 and this year the total deficit rose from £10.6 million to just under £16 million.
“In recent years, calls on the Trust caused by ATOL failures were at a low level and frequently the amount of loan interest paid exceeded the amount of compensation paid to air passengers.
“However, this year has seen a significant increase in the number of failures resulting in a Trust call, and consequently in Trust expenditure, which amounted to £5.2 million.
“The Trustees welcome their ability to put the Trust on a positive footing once again and to be able to continue protecting UK air passengers into the future.”
The biggest call – £3.1 million – was from Cruise Promotions, trading as Cruise Control, which folded in October.
This was the largest call on the Trust for the last nine years and caused a total expenditure of £4.5 million.
When it failed, 810 passengers had to be repatriated and a further 12,500 refunded.
By Bev Fearis
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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