The Department for Transport drafted reforms to the Atol scheme with the aim of limiting avoidance, but expects travel companies to find ways around the regulations.
Transport minister Theresa Villiers told Parliament’s Transport Select Committee: “Elements of the industry will try to take themselves out of the scheme. No system will be bullet-proof.”
Addressing the committee of MPs on Wednesday, Villiers expressed concern about businesses operating with what the industry has christened “fig-leaf Atols”.
She said: “We are particularly concerned about companies selling some Atol-protected holidays and others that are not protected. A business could display an Atol licence, but sell holidays that are not Atol protected.”
Villiers said expansion of the scheme would “address part of the problem”, but even with holiday sales by airlines brought into Atol “there would still be a range of holidays not in”.
Kate Jennings, head of aviation policy implementation at the DfT, said there had been no assessment of the number of businesses which might seek to avoid Flight-Plus or the number of holidays these businesses might sell.
However, Jennings acknowledged an aspect of the reforms opposed by online travel agents (OTAs) was intended to discourage avoidance - the inclusion in the Flight-Plus reforms of bookings of a flight and accommodation at different times on the same or consecutive days.
Jennings said: “The two-day [booking] period was designed with that [avoidance] in mind.”
She added: “We also propose to act to tackle agent for the consumer sales as a way to avoid the regulations.”
The European Technology and Travel Services Association (ETTSA), which represents OTAs, told Travel Weekly last month: “Our members are expected to make a huge investment in technology to track bookings over 48 hours when it is business that hardly exists.”
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