ATOL Reform - Background to Flight-Plus

For over 40 years the Air Travel Organisers Licence (ATOL) Scheme has provided financial protection to holidaymakers booking air holiday packages. However in recent years the market has changed significantly; the rise in sales of flights and overseas holiday accommodation on the internet means that more people are booking their holiday components separately. Many travel firms responded by offering dynamic holidays outside the ATOL Scheme and as a result the number of people protected by ATOL has fallen and today only around 50% of holidaymakers are protected by ATOL. However, because financial protection was traditionally prevalent, the majority of consumers do not realise that the arrangements they buy today may not be ATOL protected and that they run the risk of losing their money if their travel firm fails.

The Government recognised the need to update the ATOL Scheme to bring it into line with new trade practices and provide clarity when customers book what appears to be a package holiday. The Government is changing the ATOL Regulations so that any travel firm selling a flight together with overseas holiday accommodation (and/or car hire) at the same time or within a day of each other, must hold an ATOL. These sales are described as Flight-Plus holidays and ATOL holders will be required to pay the ATOL Protection Contribution (APC) for each customer booked to guarantee the financial protection of their customers should they fail.

This proposed change alongside the introduction of the new ATOL Certificate standard, a document that travel firms must issue to customers when they book and pay and which confirms what is protected by ATOL, will mean consumers will have greater clarity about when their holidays are ATOL protected.

Proposed amendments to CAAs Official Record Series 3, including ATOL Standard Terms, and Consultation on a proposed change to an APC Payment Period

In continuation of the CAA's engagement with industry, consumer representatives and other interested parties, the CAA is now publishing an update on how the proposed ATOL Regulations 2012 will be enacted when they come into force on 30 April 2012.

It follows on from and incorporates changes to the contents of the CAA's ATOL Reform: Information paper and takes into account feedback from industry and the Department of Transports (DfT) ATOL Reform: Summary of consultation responses and Government decision. Read the CAAs ATOL Reform Information paper responses.

The CAA is also consulting on a change to an APC payment period which brings into line the APC payment period with the reporting periods of a small number of ATOL holders. The CAA understands that the DfT plans to publish the new ATOL Regulations in March 2012; the proposals set out in this document reflect in full all changes which the CAA considers necessary to the ORS3 as a result of the DfT decision paper.

Further Information & Consultation including Attachment 1

CAA Press Notice