Online sales soar 60% latest ATOL figures show

The total number of passengers ATOL-protected by major online operators increased by 60% last year to 1.025 million from 640,000, according to figures released today. 

Forecast sales are expected to increase by a further 50% to 1.53 million in 2006, according to the Civil Aviation Authority’s latest report into ATOL business.

However, the number of people taking ATOL-protected air holiday packages and charter flights during summer 2005 fell by 3.3%, despite leisure air travel rising overall by 8% over the same period. 

As a result, the percentage of total leisure air travellers covered by ATOLs fell by 6% year-on-year to 61% in 2005, according to the CAA. This represents a reduction of 32% in nine years, the report says.

A total of  27.3 million passengers bought ATOL-protected holidays and flights in the year to September 2005, down 2.6 per cent on the previous year’s 28 million – the first drop since 2003.   

Despite the reduction in ATOL-protected passenger numbers, revenue from the sale of protected holidays rose by 4% to £14 billion and online activity continues to “grow dramatically” with the major groups recording double-digit increases in passenger numbers. 

Six of the top eight ATOL holding companies saw a reduction in sales with the exception of Thomas Cook and Expedia, which increased passenger sales by 3% and 36% respectively.

Expedia is now the fifth largest ATOL holder while Freedom Flights and Flightbookers also saw strong growth. Expedia, Freedom Flights and Flightbookers expect further passenger sales increases of 19%, 84% and 188% respectively in the coming year.

Meanwhile, the number of licence holders continues to rise, the CAA said. More than 2,440 travel businesses hold ATOLs against 2,132 at the same point last year. Business start-ups and travel agents operating small tour programmes continue to apply for Small Business ATOLs, or obtain licences through the CAA’s third party licensing agreements. There are now over 1,100 firms with Small Business ATOLs.

 CAA Consumer Protection Group director Richard Jackson said: “While the number of people who enjoy the protection of ATOL remains fairly constant, the continuing strong growth in leisure air bookings, principally direct with airlines, highlights the fact that a smaller proportion of leisure air travellers are now ATOL-protected.

“More and more people are building holidays for themselves around their flights and our concern is that most of these believe they are protected when this is not the case. We believe consumers should be alive to the potential risks so they can make an informed choice and consider whether to take their own financial protection measures, such as travel insurance that covers against insolvency.”

Report by Phil Davies

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