Trade calls for CAA to delay ATOL changes

ABTA has called on the Civil Aviation Authority to delay the changes to the ATOL scheme announced yesterday.

The association said it was ‘unreasonable’ to expect companies to comply with the changes by the CAA’s proposed introduction date of October 1.

ABTA’s head of financial protection John de Vial has also criticised the CAA’s decision to increase the minimum bond required for new ATOL holders to £50,000.

“We are pleased to see that the proposed minimum bond for new ATOL holders, including SBAs, has been reduced from £75,000 to £50,000,” he said.

“However, this is still £10,000 higher than the current minimum bond for a standard ATOL.

“Our data shows that this would over-bond (compared to a standard 15% bonding rate for new ATOLs) more than one third of all ATOL holders and nearly two-thirds of SBA ATOL holders.

“We think that this is unnecessary and contrary to Government policy in relation to supporting competition and new business start-ups, particularly SMEs (small and medium businesses) and microbusinesses.”

De Vial also urged the CAA not to make the new financial tests being introduced for small business ATOL holders unnecessarily onerous.

He called on the CAA to publish draft tests and transition proposals and consult with the travel trade before finalising them.

“We support the changes to introduce more sophisticated financial tests for ATOL holders, particularly for SBAs where there were none, it’s in everyone’s interests for ATOL holders to be strong and robust companies to ensure confidence in the industry,” he said.

“Introducing a financial test for all ATOL holders makes sense but it is important that the new tests are proportionate to business risk.

“We called on the CAA to consult with the industry and share what the proposed tests might look like and we hope that this will happen before they are finalised – they were not included in the June 2014 Consultation or the CAA Decision document published today, which acknowledges that the regulatory cost impact assessment cannot be completed without knowing what the tests are.”

De Vial added that it was unreasonable to expect businesses to meet the changes by October, especially as the CAA had originally suggested a three-year transition period, and he called on the CAA to wait until details of the revised Package Travel Directive are announced.

“Given that we expect the new Directive to be published in May and that a three-year transition period was consulted on, we still believe these changes should be synchronised with the new Directive and DfT ATOL Reform agenda.

“It is particularly disappointing when there may be a number of businesses requiring an ATOL to comply with the new Package Travel Directive scope.”

ABTA said it currently has 121 members who are SBA holders and if any now need to apply for a standard ATOL there maybe opportunities for them to save costs by applying through ABTA via the ABTA-ATOL Joint Administration Scheme.