Consultation on ATOL – What does it mean?
The Civil Aviation Authority (CAA) and the Department for Transport have published consultation documents on changes they intend to make to ATOL.
Currently run by the government and operated by the CAA, everything included in a UK package holiday is financially protected under an ATOL licence.
What might it mean for the Travel Industry?
The deadline for responding to each of the consultations is the 23rd of March. These are the main changes they are proposing to make and on which they want your views:
- The ATOL Regulations – Will be updated to adopt the new definition of a ‘package’ from PTD 2015. This clarifies who needs to hold an ATOL and has the potential to bring some business models into the scope of protection.
- Linked Travel Arrangements (LTAs) – Insolvency protection for flight-LTAs will be implemented through the Package Travel Regulations, through bonding, insurance or trust arrangements, or for the flight element through selling an ATOL protected seat.
- ATOL Protection – Will be extended to sales from UK businesses when they sell in Europe. The requirement to hold an ATOL will apply to UK businesses when they sell packages to consumers in Europe. This will make it easier for UK businesses to trade across Europe, without needing to comply with different insolvency protection regimes in each state.
- Agent for the Consumer – ATOL will be extended to businesses that are acting as agents for the consumer when they sell a flight as part of a package.
- ATOL Flight-Plus – Will be revoked as these business models will be regulated under the new definitions of package and LTAs.
- Business-to-Business Sales – Will be exempted from the ATOL scheme.
- Agents for ATOL holders – Will not be exempt from having to hold an ATOL if they are organising package holidays in their own capacity. Under the PTD 2015, if a business is organising a package, they should be responsible for its performance, including the provision of insolvency protection.
- EEA Traders – Will be able to sell packages to consumers in the UK without an ATOL, though they will need to comply with the PTD 2015 using measures in their own Member States.
- UK Agents that sell packages organised by EEA Traders – Will be exempted, as the EEA Trader would already be responsible for providing insolvency protection under PTD 2015.
- The Existing Enforcement Provisions and Sanctions – Will be updated to align them with the changes being proposed to the scope of ATOL. Views are also invited on the inclusion of civil sanctions in CAA’s enforcement toolkit to provide a more flexible and effective response to routine compliance in the ATOL scheme.
- The ATOL Certificate – Will be retained to support the information requirements in PTD 2015. This can be provided electronically, even if the customer is present, to help streamline the process for business and allow greater convenience for the consumer
The CAA consultation can be found here and the DfT consultation here.