Number of ATOL holders ceasing trading doubles

According to figures published yesterday by the Air Travel Trust, 23 ATOL holders ceased trading in the year to March 2002, nearly double the number of failures last year.

However, the Air Travel Trust said that only five cases required a call on the Trust when ATOL bonds proved to be inadequate.

In its Annual Report and Accounts, the Air Travel Trust records that £3.7 million was spent repatriating and refunding just under 20,000 passengers as a result of failures. Of this total, £423,000 was contributed by the Trust.

The Air Travel Trust Fund, set up in 1976, is part of the Air Travel Organisers’ Licensing (ATOL) system managed by the Civil Aviation Authority. Its role is to back up the individual bonds put up by travel organisers to protect holidaymakers.

The Trust Fund has been in deficit since 1996, but continues to protect the public using loans with the backing of a Government guarantee. During the year, it paid loan interest of £415,000, as well as expenditure on claims of £423,000. At the end of the year the Fund was in deficit by £8.3 million.

Colin Senior, Chairman of the Trustees, said: “The travel industry has been through a difficult period, and the calls on the Trust have been less than we might have expected in the wake of the terrorist attacks last September.

“In these difficult times the Trustees believe it is wrong for a fund of critical importance to UK consumers to be left overdrawn, especially since the interest paid amounts to over a quarter of the total deficit. We have urged Government to ensure that the next Civil Aviation Bill includes powers for a levy to refinance the Fund and give continued assurance to the travelling public.”

The concern expressed by the Trustees is also reflected in a report on the effects on the air transport industry of the September 11 terrorist attacks which was published on 4 July by the House of Commons Transport Select Committee. The Committee’s report stated: “The Committee is concerned that the Air Travel Trust Fund should be maintained at a sufficient level and calls on the Minister to bring forward legislation providing for that at the earliest opportunity.”

A full copy of the Air Travel Trust report can be found on the ATOL Website at www.atol.org.uk.

For further information contact Chris Mason on: 020 7453 6026. **Please mention you read this information on TravelMole.**