CAA Publishes More Information About Atol Reform Plans

Date: 14 November 2011

The UK Civil Aviation Authority (CAA) is today publishing an Information Paper for industry about how proposed reforms to the ATOL scheme, which provides financial protection for holidaymakers, could be enacted by the regulator when they come into force next year.

The Paper’s publication follows an announcement last month from the Department for Transport (DfT) confirming their support for reforming the ATOL scheme to provide clarity for consumers, and their proposal to bring in the changes in April 2012.

The DfT are proposing to introduce the concept of ‘Flight-Plus’ so that air holidays that are not currently covered by ATOL will become financially protected. They also include within the proposals the CAA’s suggestion that everyone booking ATOL-protected holidays is given a standard ‘ATOL Certificate’ at the point of purchase which would make it clear to them what their rights were and what was protected. Final details from the DfT on the planned reforms will be published before the end of the year.

As well as containing details about the proposed ATOL regulation standard terms, the Paper also contains information from the Air Travel Trust, which funds the protection scheme, about what their policies for claims payments will be following reform.

Richard Jackson, Director of Consumer Protection at the CAA said: “We have worked hard with the Government to bring forward proposals to reform ATOL so that people understand when they are protected and what that entails. We will be working with the travel industry to help them fully understand the proposals, so they are ready to implement them next April.

“Today’s Paper gives the industry a better idea of how the concepts set out by the DfT like ‘Flight Plus’, ‘Approved Bodies’ and ‘ATOL Certificates’ are expected to work in practice. In advance of final decisions from the Government, we will be working closely with the travel trade to get their input on these proposals. We plan to consult formally on them in the new year.”

The CAA is seeking industry feedback on the Information Paper to inform a consultation to be published early in the New Year ahead of implementation. The document can be found on the CAA website here: www.caa.co.uk/default.aspx?catid=2094&pagetype=90

The CAA is working on plans for a programme of awareness and education with the travel trade in the coming months to help to ensure that industry, from front line travel agents to senior management understand the proposals and how they will affect their businesses.

For more information contact the CAA press office on 0207 453 6030 You can also follow the CAA on Twitter at @UK_CAA

Notes to Editors:
1. The CAA’s Information Paper can be found here: www.caa.co.uk/default.aspx?catid=2094&pagetype=90
2. Indicative Next Steps timetable:
- 1. Industry and other stakeholder responses to today's Information Paper by 12 December 2011.
- 2. Before the end of the year the DfT will set out their final plans for Reform.
- 3. Early in the new year the CAA will begin a formal six-week consultation on the ATOL Regulations Standard Terms.
- 4. New Regulations will be implemented in April 2012.

3. The CAA is the UK's specialist aviation regulator. Its activities include: making sure that the aviation industry meets the highest technical and operational safety standards; preventing holidaymakers from being stranded abroad or losing money because of tour operator insolvency; planning and regulating all UK airspace; and regulating airports, air traffic services and airlines and providing advice on aviation policy from an economic standpoint.
4. The Air Travel Organisers’ Licensing scheme (ATOL) is managed by the CAA. It gives comprehensive protection to holidaymakers from being stranded abroad or losing money when purchasing air holidays and flights from licensed tour operators. It is the only licensing scheme for tour operators that sell air holidays and flights. In holding a licence, tour operators meet European Package Travel Directive insolvency protection requirements.
5. If a licence holder fails, the CAA is responsible for ensuring customers are either repatriated back to the UK or receive a refund of payments made.
6. Repatriation costs and refunds are met by the Air Travel Trust Fund, the funds of which principally come from the ATOL Protection Contribution (APC) that each licence holder is required to make when it accepts a booking under its ATOL. In some circumstances a licence holder will have also provided a bond, which is used in the first instance to protect customers.