ABTA Responds to Consultations on Changes to ATOL

A smooth and efficient implementation of the Package Travel Directive 2015 must be the overriding, immediate, priority for both regulators and the travel industry, says ABTA

ABTA has submitted its response to the Department for Transport’s (DfT) consultation on draft ATOL Regulations and the Civil Aviation Authority’s (CAA) consultation on draft ATOL Standard Terms.

Both of the proposals aim to implement the Package Travel Directive (PTD), which comes into force on July 1, 2018. However there are elements of the CAA’s proposals, to change the ATOL Standard Terms, which are not part of the PTD.

ABTA says that any broader changes to the basic operation of the ATOL scheme, which are not necessary for the implementation of PTD, should be subject to a thorough consultation process with the industry and appropriate implementation lead times.

Points raised by ABTA in its responses to the consultations include:

Department for Transport consultation

  • Risk of confusion about how and whether travellers’ monies are protected, given that flight-based Linked Travel Arrangements will be outside of the ATOL scheme, but the flight element as a Flight-Only sale will be within the ATOL scheme. ABTA believes this should be reviewed again.
  • Updating the ATOL scheme so that holding an ATOL will allow UK businesses to sell packages to consumers in Europe represents an opportunity for many travel companies and will be welcomed by many.
  • While ABTA supports the CAA being given more flexibility in enforcing the ATOL regime, we believe further detail is required on how these sanctions would be used in practice. ABTA is certainly aware of dissatisfaction from agents for ATOL holders, where the ATOL holders have not issued accurate agency agreements, and it would seem that anything that allows the CAA to deliver a more flexible and effective response to such failings would be welcome.

Civil Aviation Authority consultation on draft ATOL standard terms

  • The CAA should come back to the industry with fully worked up proposals outlining what will be expected of ATOL holders in future, in terms of providing information before and after sale, and open it up for consultation. Travel businesses should be allowed time to implement the changes necessary for compliance with PTD before introducing further changes.
  • Transitional arrangements will be necessary to allow businesses and CAA to adapt to the new rules so we welcome the proposed transitional arrangements.
  • ABTA Members have raised a number of queries about online ATOL certificates, whilst not being entirely opposed in principle. More information is needed including on the costs, speed and funding of the system.
  • We believe anything in the draft ATOL Standard Terms which is additional to PTD should not be brought in by 1 July, instead further consultation should be done with industry to flesh out the detail, and give businesses time to adapt to PTD before taking on more changes.

Simon Bunce, Director of Legal Affairs at ABTA said: “Overall the proposals from the Department for Transport are largely fine by way of implementing PTD. We have raised questions over some of the wording to seek clarity, and pointed out the risk of confusion to consumers about the financial protection for Linked Travel Arrangements and flight-only sales.

“Some of what the CAA is proposing goes beyond what is required by the PTD. While many of the additional issues raised have merit, more detail is needed to fully understand how it would work in practice.

“We believe anything which is additional to PTD should not be brought in by July 1, instead further consultation should be done with industry to flesh out the detail, and give businesses time to adapt to PTD before taking on more changes.

“The industry has been waiting a long time for clarity about their obligations when selling holidays from July 1 and is still waiting for the final detail. There is nothing to be gained from rushing through further changes that are not immediately necessary and have not been fully thought through when travel companies already have a lot to do to comply with PTD, not to mention other regulation changes such as GDPR.”