ATOL protection could be extended to scheduled airlines from 2013, transport minister Theresa Villiers said this week.
She told a parliamentary reception with TUI Travel that the Coalition Government was looking at introducing primary legislation to force scheduled airlines to offer customers the same financial protection as offered by package holidays.
Villiers told TUI Travel chief executive Peter Long that the Government would start consultations soon on reforming the ATOL scheme.
The first stage will be to extend the ATOL scheme to bring in travel agents who put together their own holidays. The new Flight Plus ATOL, which was first mooted by the Government last autumn, should come into effect next year when it extend financial protection to six million dynamically packaged holidays a year.
However, Villiers said the scheme could be extended further to include scheduled airlines at a later date. She said: "We are also looking at wider reform for ATOLS to see if there is a possibility of bringing scheduled airlines into the scheme."
This is the first time the Government has suggested it is seriously considering forcing scheduled airlines to provide passengers with financial protection against their own failure. Previous governments have shied away from the move, which will require a change in the law.
"This will be a long-term goal," said Villiers. "It will require primary legislation…this will be debated in parliament in 2012/13."
By Linsey McNeill
