Air Travel Trust Publishes New Payment Policy

Date: 06 August 2012

The Air Travel Trust (ATT) has today published a new policy for making payments in the event of an ATOL holder failure, following the introduction of reforms to the ATOL scheme in April this year.

The new policy sets out the circumstances in which the trustees of the ATT will make payments for the benefit of consumers when an ATOL holder fails. For example, payments may allow consumers to complete their holidays, provide refunds where consumers are unable to travel or make contributions to Flight-Plus arrangers in the event that their seat supplier ATOL holder has failed.

The policy makes clear that travel businesses must have the correct documentation in place; in the past the ATT has been concerned that poor standards of documentation in the industry have confused consumers and made it difficult for the CAA to handle claims efficiently and avoid delays for consumers in receiving their refunds.

However, with the introduction of the ATOL Certificate as part of reforms to the ATOL scheme, consumers will now have greater clarity on how their holiday arrangements are financially protected and by whom. The trustees believe that the certificate will lead to real improvements in consumers getting their refunds more quickly in future.

In addition, agency agreements – also brought in as part of ATOL reform – will confirm the relationships between the principal ATOL holders and their agents and remove any questions about liability between these parties. These are vital pieces of documentation that the travel trade must have in place and issue correctly, as otherwise payments made by the ATT may be affected and potentially agents could find themselves responsible for refunding customers.

An ATT spokesperson said:

“When an ATOL holder fails, the trustees want to make payments as quickly as possible so that consumers can either continue their holiday or get their money back to rebook. Having the right documentation in place is absolutely essential, and the revised policy makes this clear to travel businesses and sets out what their obligations are.

“This new policy brings clarity to the industry on when payments will and will not be made, and reiterates how important it is that travel businesses understand and comply with the new documentary requirements following ATOL reform.”

The ATT payment policy is available now from the ATOL website: ATT Payment Policy.

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Notes to editors

1. The Air Travel Trust Fund (ATTF) is the primary source of funding when an ATOL holder fails. Monies from the ATTF are used to meet the costs of allowing passengers to complete their holidays or refund them following a failure. The Fund is an independent statutory trust, but is administered on behalf of the Air Travel Trust (ATT) by the UK Civil Aviation Authority.
2. The ATOL scheme ensures people who have booked an air holiday with an ATOL holder are protected if their travel organiser ceases trading – bringing them back to the UK if abroad, or refunding them if yet to travel.
3. Reforms brought in to strengthen the scheme have been in place since 30 April and include the introduction of ‘Flight-Plus’ – ensuring flights sold with accommodation and/or car hire on the same or consecutive days are financially protected.
4. The ATOL Certificate aims to help holidaymakers understand how their holidays are protected and by whom. From 1 October 2012, any customer that purchases an ATOL-protected holiday will have to be given an ATOL Certificate.