A decision to increase ATOL protection charges from £1 to £2.50 has helped the Air Travel Trust fund reduce its debt by £14.7 million.
The rise, which came into force last October, helped the debt fall to £38.1 million at the end of March, according to its latest report.
At the current rate of decline, the ATT believes the debt will be completely cleared by the end of the current financial year.
ATT chairman Roger Mountford said: “This time last year the Trust was facing significant pressure on its liquidity, largely due to the failure of XL Leisure Group.
“The increase to the rate of APC has already helped strengthen the Trust’s financial position and, coupled with the increased banking facility, has increased the resources available to the ATT, ensuring that the Trust can continue to meet its objective of providing funds to customers affected by the failure of their ATOL holder.”
Following the publication of the report, the Air Travel Insolvency Protection Advisory Committee (ATIPAC) reiterated its support for plans to extend the scope of the ATOL scheme.
It said reform of ATOL is long overdue and the new Government must not miss the opportunity to bring clarity to consumers and to extend financial protection arrangements to a greater number of holidaymakers.
Chairman John Cox said: “The reform proposals are a real chance to address this serious problem. Expanding the scope of ATOL to a ‘flight plus’ model will help to end the current confusion.
“The difficult economic conditions have put real pressure on the travel industry, the volcanic ash shutdown, the World Cup and travel related industrial action have only added to this.
“However, we have been surprised at the resilience of the travel industry and the travelling public. There were fewer failures of ATOL holders than expected in 2009-10 and we believe this will continue into the forthcoming year. “
The biggest failure was Scottravel, which cost £4.3 million.
The failure of Hebridean International Cruises cost £1.8 million, Allbury Travel Group £1.2 million, Freedom Direct Holidays £1 million and CustomFlights.co.uk £950,000.
By Bev Fearis
