Travel firms will not face immediate enforcement action if they are not able to implement new Atol regulations by the July 1 deadline.
Last week, the CAA and Department for Transport (DfT) issued long-awaited consultations on Atol, giving the industry just a month to March 23 to respond.
Andy Cohen, head of Atol at regulator the CAA, conceded timescales to update the consumer protection scheme were “tight”.
But he said the fundamentals of the change in law have been known since 2015 when the EU’s revised Package Travel Directive (PTD) was approved.
“What is a tight timescale is the mechanism to achieve the aims of the PTD,” he said. “Ideally we would have given the industry longer, but we are where we are.
“With that in mind, we understand some firms may have difficulty fully implementing the regulations in that period.
“But provided we see, in the very short term, they are taking steps to implement those licence changes, we would not look to take enforcement action.”
The proposed changes to Atol include a broader definition of a package to cover what the UK has treated as Flight-Plus since the 2012 Atol reform.
However, the government is proposing to regulate Linked Travel Arrangements (LTAs), a new category introduced by the revised PTD, separately to Atol.
In an earlier consultation, the travel sector overwhelmingly supported LTAs being covered by Atol, and government said it would consider how best to achieve this.
Describing LTAs as “the unloved child” of the new PTD, travel lawyer Rhys Griffiths, partner at Fieldfisher, said concerns about the impact on Atol prompted the change of heart. He said: “The government is concerned that including LTAs in Atol will pollute the Atol brand because there is a marked difference in the protection provided.”
David Bourne, CAA head of Atol policy and governance, accepted LTAs are “quite confusing” and “complicated”. He said: “Whether they are in Atol or not is not the issue. The real issue is they are going to be confusing in themselves. My understanding is this was a consumer-focused decision.”
Chris Photi, senior partner at White Hart Associates, said LTAs will be “a mess” and “impossible to police”. And he described measures to tighten rules for small businesses as “a step towards making travel the most-regulated industry in the UK”.
Bourne disagreed. He said: “We have quite a few measures in place to ease the burden on small businesses. We keep the regulatory system proportionate.”
Cohen said: “We welcome the industry’s views on the ‘Modernising Atol’ consultation. This is as an important consultation for them as it is for the CAA, and we are keen to receive their views and insights as we consider the future of the Atol scheme.”
Trade association Abta said in a statement: “We are reviewing the Department for Transport’s consultation on Atol and the Atol standard terms from the CAA. We will be seeking feedback from members to inform our response.”
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