CAA declines to comment on possible financial protection crisis

CAA declines to comment on possible financial protection crisis

The Civil Aviation Authority has declined to comment on weekend reports of a growing crisis at the Air Travel Trust fund which underwrites financial protection for holidaymakers.

A report in the Independent on Sunday suggested Barclays Bank has turned down a request to extend the fund's £60-million overdraft limit as the CAA pays out tens of thousands of claims for unfulfilled holiday bookings following the collapse of XL Leisure Group in September.

These claims will be met from what remains of a £42 million bond provided by XL Leisure and the overdraft facility of the Air Travel Trust fund, which is guaranteed by the government.

The fund was £22 million overdrawn last April and there is fear among travel firms that the costs will be passed on to the trade if the fund exceeds its overdraft.

However, sources close to the CAA queried the reported figures, pointing out many claims remain to be assessed.

One source told Travel Weekly: "There is speculation all over the place, but I would be surprised if the CAA did not have regular conversations with its bankers to discuss this facility, especially in a downturn."


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