ATOL consultation highlights gap in cover
International Passenger Protection (IPP), a provider of financial insurance solutions to the UK travel trade, has said that the recent Air Travel Organisers’ Licensing (ATOL) reform consultation paper, issued by the Department of Transport, highlights the gap in consumer protection under the government scheme, even after the proposed extension in cover. The reform, which is targeted to be introduced at the start of next year, is estimated to leave over half of travellers from the UK remaining unprotected, which equates to tens of millions of travellers that would be financial exposed during what is an extremely volatile time in the industry. Tickets purchased directly with airlines, UK trips, and non-air travel (such as car ferries), are just three of the significant travel groups that remain outside the protection in the proposals. Michael Ward, director at International Passenger Protection (IPP), said: “The consultation document highlighted what a complex issue consumer protection in travel has become.” He praised the consultation paper, saying: “Especially commendable is providing clarity to consumers on what is and is not protected through a newly designed ATOL certificate. Hopefully consumers will then be directed to where protection can be sourced and make an informed decision as to whether to make a purchase.” The reform refers to potential future legislation that will include airlines, and makes strong reference to a Europe-wide survey on consumer protection in the aviation sector. IPP believes that such as extension would be fiercely opposed by airlines, as Ward explained: “The report states that the Air Transport Trust (ATT) is currently at a deficit of around £42 million; that’s without the huge additional liabilities that the inclusion of airlines would bring. It’s such a hugely competitive market, where profit margins are being squeezed to breaking point, leading to record losses in 2011. An extra levy would add to the long list of challenges facing airlines, which include oil prices, industrial action, low fares, political unrest, natural disasters, and terrorism. Would the ATTF sustain an airline collapse? It would be an enormous risk.” The annual report from the ATT shows the deficit of the organisation to be £42.3 million, despite that fact that the Trust received income of £47.7 million during the financial year ending March 2011. A statement from the ATT reads: “The most significant impact on the Trust arose from the insolvency of Goldtrail Travel Limited, going into administration at the height of the 2010 summer holiday season. The circumstances around this failure are under investigation. The failure highlighted the poor standards of customer documentation issued by some in the travel industry, leading to unacceptable delays in refunds to holidaymakers.” The organisation’s annual report noted that 29 ATOL holders failed during the financial year, and because of the ATOL scheme, over 47,000 ATOL-protected passengers were able to complete their holidays and around 146,000 received refunds of advance payments. Roger Mountford, chairman of the ATT, said: “Despite the Trust facing an increase in its deficit, largely caused by the failure of Goldtrail Travel Limited, it has continued to meet its objective of providing refunds to customers affected by the failure of their ATOL holder. This past financial year has seen the Trust either repatriate or refund a record 193,000 UK holidaymakers, Government has published its consultation on reforming the scope of ATOL and bringing clarity to consumers, the trade and the ATT as to who is covered by the ATOL scheme.” As if the travel industry needed further confirmation of the difficult trading situation in which it finds itself, as ITIJ went to press, news came in of another travel firm, Dream Holidays, which ceased trading on 19 July. The Civil Aviation Authority (CAA) said that the 525 people who were on holiday at the time of the collapse would be able to complete their holidays and return to the UK thanks to ATOL protection. Around 1,800 people with forward booking with the company will be able to claim a full refund for their holidays from the CAA.
International Passenger Protection (IPP), a provider of financial insurance solutions to the UK travel trade, has said that the recent Air Travel Organisers’ Licensing (ATOL) reform consultation paper, issued by the Department of Transport, highlights the gap in consumer protection under the government scheme, even after the proposed extension in cover. The reform, which is targeted to be introduced at the start of next year, is estimated to leave over half of travellers from the UK remaining unprotected, which equates to tens of millions of travellers that would be financial exposed during what is an extremely volatile time in the industry. Tickets purchased directly with airlines, UK trips, and non-air travel (such as car ferries), are just three of the significant travel groups that remain outside the protection in the proposals.
Michael Ward, director at International Passenger Protection (IPP), said: “The consultation document highlighted what a complex issue consumer protection in travel has become.” He praised the consultation paper, saying: “Especially commendable is providing clarity to consumers on what is and is not protected through a newly designed ATOL certificate. Hopefully consumers will then be directed to where protection can be sourced and make an informed decision as to whether to make a purchase.”
The reform refers to potential future legislation that will include airlines, and makes strong reference to a Europe-wide survey on consumer protection in the aviation sector. IPP believes that such as extension would be fiercely opposed by airlines, as Ward explained: “The report states that the Air Transport Trust (ATT) is currently at a deficit of around £42 million; that’s without the huge additional liabilities that the inclusion of airlines would bring. It’s such a hugely competitive market, where profit margins are being squeezed to breaking point, leading to record losses in 2011. An extra levy would add to the long list of challenges facing airlines, which include oil prices, industrial action, low fares, political unrest, natural disasters, and terrorism. Would the ATTF sustain an airline collapse? It would be an enormous risk.”
The annual report from the ATT shows the deficit of the organisation to be £42.3 million, despite that fact that the Trust received income of £47.7 million during the financial year ending March 2011. A statement from the ATT reads: “The most significant impact on the Trust arose from the insolvency of Goldtrail Travel Limited, going into administration at the height of the 2010 summer holiday season. The circumstances around this failure are under investigation. The failure highlighted the poor standards of customer documentation issued by some in the travel industry, leading to unacceptable delays in refunds to holidaymakers.” The organisation’s annual report noted that 29 ATOL holders failed during the financial year, and because of the ATOL scheme, over 47,000 ATOL-protected passengers were able to complete their holidays and around 146,000 received refunds of advance payments.
Roger Mountford, chairman of the ATT, said: “Despite the Trust facing an increase in its deficit, largely caused by the failure of Goldtrail Travel Limited, it has continued to meet its objective of providing refunds to customers affected by the failure of their ATOL holder. This past financial year has seen the Trust either repatriate or refund a record 193,000 UK holidaymakers, Government has published its consultation on reforming the scope of ATOL and bringing clarity to consumers, the trade and the ATT as to who is covered by the ATOL scheme.”
As if the travel industry needed further confirmation of the difficult trading situation in which it finds itself, as ITIJ went to press, news came in of another travel firm, Dream Holidays, which ceased trading on 19 July. The Civil Aviation Authority (CAA) said that the 525 people who were on holiday at the time of the collapse would be able to complete their holidays and return to the UK thanks to ATOL protection. Around 1,800 people with forward booking with the company will be able to claim a full refund for their holidays from the CAA.