Trust Fund plunges further into red

Monday, 15 Jul, 2005 0

The Air Travel Trust Fund has slid further into deficit after forking out more than half a million pounds in claims – and a further half a million in interest payments, its year end accounts have revealed.

The Trust’s deficit now stands at £10.6 million, almost £1 million more than the previous year.

Despite a fall in the number of company failures from 18 to 14 in the year ending March 31, five of those involved a call on the Trust Fund of £540,00, a rise of £334,00 and the highest for five years. Interest totalled £508,000.

The Civil Aviation Authority is investigating the five companies for possible over-trading.

Such an overwhelming deficit further underlines the desperate need for the fund to be replenished, which has been proposed as part of the government’s Civil Aviation Bill.

“New levy power is welcomed by the Trustees and they remain hopeful that the bill will be passed at the earliest opportunity in order to rectify the current situation,” the annual report said.

The biggest call followed the collapse of Ghana Travel in March which saw ATT shell out £566,000 in refunds to customers and for those already overseas to continue their holiday. Ghana’s bond was only £321,000, leaving the fund to pick up the remaining £245,000.

“The CAA is investigating apparent overtrading by this company,” the report revealed.

Also being probed is Unitours Travel, which collapsed last September. The Trust was left with a bill of £180,000 after a shortfall in the company’s bond.

Other calls on the Trust were made by Euro Cities to the tune of £72,000, Peopleschoice Holiday for £22,000 and APA Travel Services for £20,000.

All are being investigated.

In cases of overtrading, the report explained, personal guarantees of the company bosses are taken to court and in a bid to recover the funds.

“ATOL enabled 11,634 people to complete their holiday and return home with minimal disruption,” the report added. “A further 21,969 customers received refunds of their advance payments.”

Report by Steve Jones