ABTA developing scheme with CAA to help industry comply with ATOL Reforms

ABTA developing scheme with CAA to help industry comply with ATOL Reforms

ABTA today confirms that it is developing plans with the CAA to introduce a new scheme to help ABTA travel agents to comply with the ATOL system of financial protection more easily and cost effectively.

Last week, the Department for Transport outlined a package of reforms to ATOL to extend protection to include ‘Flight Plus’ holidays. A ‘Flight Plus’ holiday is when a customer buys a flight and accommodation and/or car hire, together (either on the same day as the flight, the day before or the day after) from the same travel company. 

While details of the new scheme will be set out for Members in due course, it is expected that it will enable ABTA travel agents who wish to sell ATOL-protected holidays to acquire an ATOL licence directly through ABTA and save them the additional costs and paperwork of applying for an ATOL individually. It is expected to provide a cost-effective ATOL application process for travel agents in two key ways:

*  ABTA will offer to take on responsibility for processing ATOL applications, thus enabling administrative cost savings to be passed on to Members.  The cost of a full ATOL licence, as outlined by the DfT, is £1,890 on initial application, or £1,115 for a small business ATOL. ABTA expects to be able to offer Members a significant saving on these costs, the details of which are to be announced in due course
*  ABTA is developing a mechanism to hold a combined bond for both the ABTA and ATOL system requirements, so that ABTA Members are not required to apply for a separate bond for the CAA. Under the new scheme both retail bonding requirements and new ATOL bonding requirements will be captured under a combined bond.

Mark Tanzer, ABTA chief executive said: “Feedback coming back from our Members is that they are concerned with the complexity and administrative requirements of the reforms, particularly during what is peak booking season. I am pleased that we are working with the CAA to produce a scheme that will enable ABTA Members to obtain an ATOL licence through their membership, under a combined ABTA financial bond that will cover their ATOL requirements and their retail bonding requirements. This will be a real benefit for our Members, saving them a considerable administrative burden, duplication of work and extra expense.”

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Companies with a licensable annual turnover of up to £1.5M should be eligible for the scheme, making it ideal for SMEs and microbusinesses who require an ATOL for the first time. Qualifying ABTA Members who already hold an ATOL will be able to opt in to the scheme from their September 2012 or March 2013 ATOL renewal. The solution will be administered by ABTA, acting as a co-administration agent for the CAA.

ABTA and the CAA will publish further details of the scheme in due course.  Members should contact ABTA Member services or their financial liaison officer for further information.