The Changes to the Atol consumer protection scheme that start today do not go far enough, according to the Transport Select Committee.
In a report issued today, the committee says holiday sales by airlines should be included and more clear information provided for consumers. It also calls for any future reform to be funded by the travel industry.
The MPs argue that information is "patchy" for passengers who book flight-only and highlight the fact that travel firms who act as 'agent for the customer' will remain outside the scheme.
Committee chair Louise Ellman MP said: "The changes are unfair to some consumers and to sections of the travel industry.
"Information can be unclear and protection is patchy for passengers who book flights only, and holiday sales by airlines or some types of travel agent (agent for the consumer) remain outside the scheme."
The MPs call on the CAA to work with the airlines to develop a code of practice providing information for all consumers and distinguish between consumer protection and repatriation cover.
They also demand the government undertake research into consumers' views on whether the scheme should be extended. Finally, they suggest Atol Protection Contributions be linked to the value of the holiday booking, instead of the current £2.50 flat rate.
Andy Cohen, CAA head of Atol licensing, said: "We welcome the Transport Select Committee findings. We will be studying them in detail and looking to have discussions with Atol holders and airlines in the near future."
However, he rejected criticism that the reforms had been pushed through without consulting consumer groups. Cohen said the CAA had an understanding of the level of financial protection consumers would prefer from research among holidaymakers
Trade body Aito welcomed the views of the select committee, the association's director for industry issues, Noel Josephides saying:
“We see the introduction of the new Flight-Plus Atol as merely the first step towards extending the cover provided to the consumer and levelling the playing field between companies selling the same products.
"Those companies outside the constraints of Atol regulation yet offering similar travel arrangements have been allowed to grow and prosper at the expense of their heavily-regulated counterparts – Aito members and others – as, we are glad to see, the Committee recognises.
"However, Aito doubts that research with consumers, as suggested by the Transport Committee, will clarify the direction of further Atol reform measures.
"Consumers should automatically be protected because they will usually be blissfully unaware of the risk they are taking when driven to seek the cheapest deal in the current economic climate, no matter how much time and money is spent educating them.
"Understandably, it’s only when they lose their money or become stranded abroad that they realise the heavy financial penalty that accompanies inadequate financial protection.”
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