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Covid-19 causes collapse of 21 travel companies
More than 20 ATOL holders have already collapsed this year due to the Covid-19 pandemic at a total cost to the Air Travel Trust Fund of around £33 million.
The Air Travel Trust has just £35 million left in the pot after paying out £250m following the collapse of Thomas Cook last year.
As it published its accounts for the year to March 2019 today, the Civil Aviation Authority, which manages the Fund confirmed Thomas Cook collapse – which happened during the 2019/2020 financial year – was the biggest failure since the creation of the ATT.
So far this year, a further 21 companies have failed, most of which were as a direct result of Covid-19, according to the CAA.
However, it said that it still had £35m in cash reserves plus access to a £75m loan. If this is insufficient, it expects the government to provide additional financial support.
"That expectation is based on the support provided by HMG (Her Majesty’s Government) to the ATT over many years, recent written assurance provided by the Secretary of State for Transport, and the Trustees’ view as to the obligations on the UK to implement the Package Travel Directive effectively," it said.
The commercial borrowing facilities currently expire in May 2021 and the trustees anticipate renewing this facility at that time, it added.
For the year to the end of March 2019 the Air Travel Trust Fund raised £65.7m through a £2.50 passenger levy, but the CAA said that during the first six months of the pandemic income levels have fallen by two thirds.
Neverthelss, it said the ATT has ‘adequate resources available to continue in operational existence for the foreseeable future’. It said it could survive at least another 12 months.
By Linsey McNeill, Editor (UK)
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Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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