The Department for Transport has confirmed an April start date for changes to Atol consumer financial protection.
Transport minister Theresa Villiers unveiled the final shape of long-awaited reform to the Atol licensing scheme this morning.
The changes will bring retailers into Atol licensing for the first time from April 30. The move from early April follows the DfT’s delay in making an announcement that was originally expected before the end of last year.
High street and online travel agents will in future require Atol cover to sell a flight plus accommodation or car hire abroad - a transaction typically referred to in the travel industry as a ‘dynamic package’.
The financial protection the licence brings will add a £2.50 per person Atol Protection Contribution (APC) to the cost of booking.
Retailers will have to choose whether to acquire a new Flight-Plus licence for themselves, sell Flight-Plus holidays under the licence of an Approved Body, or sell only package holidays protected by the licence of a supplier.
The full range of changes will not take force until October 1.
In a statement to Parliament, Villiers confirmed the changes would "bring into the Atol scheme Flight-Plus holidays sold by tour operators and travel agents. These are holidays that look like packages but don’t meet the legal definition and so do not currently require protection under the scheme."
Villiers said: “Including these holidays will end a significant source of confusion for consumers, and we expect up to an additional six million holidays a year will be fully Atol-rotected as a result.
"To give the travel trade sufficient time to prepare, this requirement will come fully into effect on 1 October. Until then, consumers will receive clear confirmation that their holiday or flight is Atol protected.
"The new regulations will include a number of changes to the draft regulations consulted on. These include changes to the definition of a Flight-Plus holiday and a revised approach to the exemption for flight-only sales where tickets are provided immediately on payment." Details of the changes are included in the summary of responses and the government's response on the DfT website.
Villiers said: "It is essential the scheme should apply in an effective way in the modern holiday market; so that consumers are clear about their rights and how to use them, and holiday companies know which of their products must be protected.
"In addition the Air Travel Trust Fund needs to return to a financially self-sustaining basis as soon as possible so that taxpayers’ money is no longer exposed to risk. We expect these reforms should allow the Atol scheme’s financial deficit to be repaid within three years. This will pave the way for possible future changes to improve how the scheme is funded and managed."
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