Air Travel Trust reports £18m surplus

Air Travel Trust reports £18m surplus

The Air Travel Trust (ATT) which pays out to holidaymakers when a travel firm fails has returned to surplus for the first time in 17 years.

The ATT annual report published this morning confirmed a fund surplus of £18 million – the first time it has been in the black since 1996.

The fund was in deficit to the tune of £18.45 million a year ago and was £42 million in the red as recently as March 2011.

The trustees report they took in £48.1 million in Atol Protection Contributions (APC) in the year to March, up from £42.6 million in the previous 12 months.

The £5.6 million increase was mainly due to Flight-Plus Atol payments following introduction of the licence for flight-plus bookings in April last year.

The ATT reported 19.2 million passengers made Atol payments in 2012-13, up from 17.3 million the previous year.

At the same time there were only 11 Atol company failures during 2012-13, representing a cost to the fund of £844,000.

This was down from 23 failures costing more than £14 million in 2011-12.

Only 37 passengers had to be repatriated during the 12 months and 1,354 were entitled to refunds.

ATT chairman Roger Mountford said: “The relatively low number of Atol-holder failures shows how well the travel industry performed last year, despite challenging financial circumstances.

“The industry worked alongside the Civil Aviation Authority to prepare for Atol reform, which was essential to ensure the scheme reflected the changing way people book holidays.

“This more stable period has resulted in the ATT’s welcome return to surplus, and with Flight-Plus successfully in place, consumers now enjoy greater protection for their holidays.”

Mountford added: “The introduction of the Atol certificate has also brought much-needed clarity to the scheme.”

Atol Certificates were introduced last October.

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Trade concerns over latest Atol overhaul

Trade concerns over latest Atol overhaul

By Ian Taylor |

Trade concerns over latest Atol overhaul

The government has begun moves to overhaul Atol funding, triggering fears that an end to state backing so soon after Flight-Plus reform will damage the sector.

The Department for Transport (DfT) denied any change of policy. But with the Air Travel Trust fund, which provides financial protection to holidaymakers, poised to go into credit for the first time since the 1990s, it is believed ministers want to end 
the government’s liability for a future major failure.

Moves to revise the scheme are already under way. The Civil Aviation Authority (CAA) met senior industry figures to discuss changes before Christmas and the DfT is poised to issue a ‘call for evidence’ within weeks.

This would lead to a consultation later this year, with the DfT hoping to have a new funding scheme in place by 2014.

That has led to fears all Atol holders will have to bear the cost of trust arrangements or insurance premiums on protected holidays.

The extension of Atol to Fight-Plus sales has seen more companies operating trust accounts, which hold customers’ money until they take their holidays. The problem is the impact on cashflow.

A CAA spokesman said: “We’ve always said we would review funding arrangements when the fund returns to surplus.” A DfT spokeswoman insisted: “There is no greater urgency or added pressure from us.”

However, the DfT confirmed changes could be in place by 2014.

Atol specialists expressed alarm at the prospect. Association of Atol Companies legal advisor Alan Bowen said: “We’re aware of rumours the government is looking at alternatives to the existing protection scheme. The industry would be happy if things just sat still for a while. Trust accounts are not a panacea. There have to be options for people.”

CAA confirms April ‘too soon’ for Atol reform

CAA confirms April ‘too soon’ for Atol reform

Jan 31, 2012 12:00PM GMT

The government’s planned Atol reform will not be implemented in full from April, the Civil Aviation Authority has admitted.

CAA consumer protection group director Richard Jackson said the reforms would come in in April, but businesses will not be expected to fully comply until October.

He told the parliamentary transport select committee today: “It will be difficult for the industry to be ready by April because it can’t move finally until the Department for Transport announces its decision.

“I will be surprised if all the changes will come in in April. There will be a sensible implementation phase. We will wait until probably October 1 for all the changes required to be made to systems.”