British travellers are poised to receive greater protection should an airline go bankrupt, following plans for an overhaul to the ATOL system by the Transport Secretary, Lord Adonis.
He is backing the extension of financial protection to an estimated five million UK holidaymakers who book their own travel arrangements.
Under the current system, only those who buy complete tour packages are covered by the Air Travel Operators Licensing scheme.
However coverage does not extend to people who book their flights directly with an airline.
The move follows last year’s spate of airline collapses, including XL, Zoom and Silverjet.
Passengers were left having to pay another airline to get home or lost the full cost of the return ticket if the carrier collapsed before the holiday started.
The proposals announced by the Government would only cover certain elements of DIY travel packages.
It would only extend to those who booked the flight and at least one other component of the holiday - such as car hire or hotel - through the same website or travel agent.
Those who book everything separately would still not be covered, unless they paid by a credit card or took out insurance.
The ATOL scheme reform plans are subject to a 12-week public consultation.
Detailing the ATOL review, the DfT said: “The objective of the reforms in the consultation is to provide greater clarity for consumers and the travel trade about the scope of ATOL protection for holidays and flights.
Lord Adonis said: “The ATOL scheme has remained a source of reassurance for travellers since it was drawn up in the 1970s. However, since that time, there have been big changes to travel patterns.
“The concept of a package holiday has become blurred, as many holidays are now sold through mix-and-match components.
“Consumers must be able to make informed choices. The changes we are proposing will help ensure that the scheme remains relevant to the way people book their holidays today and still offers excellent protection for travellers.”