1. The sale of air travel in the UK is restricted by law to protect customers, through the Civil Aviation (Air Travel Organisers’ Licensing) Regulations 1995 (“the ATOL Regulations”). These affect all air travel sales in the UK, whether they are for air tickets - at a discounted or at a full fare - or for packages.
2. Airlines do not themselves have to comply with the ATOL Regulations to sell seats on their own flights, but they are required by other legal conditions (the Licensing of Air Carriers Regulations 1992, and, for foreign airlines, permit conditions) to ensure that they do not sell seats to an unlicensed travel firm when an ATOL is needed.
3. This Guidance Note sets out the legal framework and gives advice on how different types of sales are affected by the ATOL Regulations.
4. With limited exceptions, firms selling air travel must hold an Air Travel Organiser’s Licence (ATOL) granted by the CAA. The exceptions are:
5. IATA agents who issue scheduled tickets as soon as they take any payment, and business account agents who are paid after the flight, do not need to hold an ATOL. Additionally, an IATA agent may take a payment for a published fare without issuing a ticket provided that it issues a Miscellaneous Charges Order (MCO) or a Multi Purpose Document (MPD) for the amount accepted. Where either a ticket or an MCO/MPD is issued, the airline will be responsible to provide either travel or a refund to the customer if the agent fails.
Whom Can an Airline Accept Published Fare Bookings From?
6. In most cases, travel agents who sell discounted scheduled tickets obtain them from consolidators, though some deal direct with airlines. In either case, an agent will not usually issue tickets as soon as it takes money, so the sale has to be covered by an ATOL. The types of ATOL are covered later in this leaflet.
7. Where a wholesale consolidator sells through travel agents, the ATOL will normally be held by the consolidator, who will authorise agents to sell on its behalf. The agent must issue documents when it accepts payment showing that the customer is being booked with the ATOL holder.
8. You must not sell to agents who claim to be authorised agents of ATOL holders - you must deal with the ATOL holders direct, whether the ATOL holders distribute tickets through travel agents or sell to the public themselves.
Whom Can an Airline Provide Net Fares to?
Whom Can an Airline Not Provide Net Fares to?
9. The same principles apply to “group” bookings made with airlines. Anyone who places a group booking direct with a scheduled airline, and will sell tickets to third parties, must either issue tickets (or MCOs or MPDs for published fares) when they take payment, or they must hold an ATOL.
10. You must not sell to agencies that do not hold ATOLs and cannot issue tickets in exchange for payment. Agencies who ask about group bookings should be told to seek advice from the CAA, or to place the booking with an ATOL holder who is willing to appoint the agent to act on its behalf. If it does so, you must deal direct with the ATOL holder.
11. Travel organisers who want to buy seats for use in inclusive packages must hold an ATOL with a four-figure licence number - see the categories of licence in the next section of this leaflet.
12. There are four kinds of business covered by ATOLs. Two kinds are supported by bonds - Fully Bonded for all packages and for charter sales, and Scheduled Bonded for discounted scheduled seat-only tickets. The third kind - Agency - also covers discounted scheduled seat-only tickets but it requires only a minimum bond and is supported mainly by Deeds of Undertaking from airlines. The fourth kind is sales between ATOL holders, or “ATOL to ATOL” sales.
13. The difference between bonded and Agency ATOLs is that a bonded ATOL holder is a principal and is fully responsible to customers for the sales it makes; if it fails, its bond will be used to refund customers and a scheduled airline will not be liable to carry passengers or to give refunds except where it has issued tickets.
14. For Agency sales, the ATOL holder is the scheduled airline’s agent, and if it fails the airline will be responsible for all bookings and payments that it or its sub-agents have accepted for that airline’s flights, even though tickets have not been issued and the airline has not collected payment.
15. If you want to sell net or discounted seat-only fares through a firm that does not yet hold an ATOL, you can provide a Deed of Undertaking (provided that you operate in the UK and have a UK office) and this will usually enable the firm to obtain a licence; you cannot deal with it until a licence has been granted. You should however provide Deeds of Undertaking only if you recognise and are willing to accept the risks and responsibilities attached to them. If you are not, you must insist that the firm obtains a bonded ATOL before you deal with it.
16. When ATOL holders approach you for seats, you can distinguish between them by their licence numbers as follows:
17. You can find the names and ATOL numbers of all licence holders, and the number of seats covered by their licences, on our website (www.atol.org.uk) if you access the ATOL Database under the Trade Information heading. The Database also allows you to set up and run your own reports on a selected list of ATOL holders.
18. If you are asked for a number of seats which seems large in relation to the seats covered by a particular licence, you should check with the CAA whether the sale is in order.
19. We’ll be glad to help with queries. If you want advice, to check an ATOL number or to find out whether a firm holds a licence, call 020 7453 6430 or 020 7453 6360.
Civil Aviation Authority
Air Travel Organisers' Licensing
Revised October 2001