No cut in £2.50 Atol charge despite £18m surplus

No cut in £2.50 Atol charge despite £18m surplus

There will be no rush to cut the £2.50 rate of Atol Protection Contribution (APC) on protected holiday bookings despite the £18 million surplus in the Air Travel Trust fund which pays to repatriate and refund consumers.

The Department for Transport (DfT) is about to issue a ‘call for evidence’ on changing the way the Atol scheme is funded and the CAA confirmed: “We do not expect a reduction in the APC rate in the short term.

"There will certainly not be any changes until the DfT has considered responses to its call for evidence.”

The Air Travel Trust annual report, published on Monday, revealed the fund was back in surplus for the first time since 1996 after being £18 million in the red just a year ago.

CAA consumer protection group deputy director David Moesli attributed the turnaround in part to "the introduction of Flight Plus and the very low level of failures".

Moesli said: “It’s difficult to comment on why there was such a low level other than to say it’s a good thing. It’s a difficult market. People know having cash in the bank is important and they are managing businesses quite conservatively.”

Referring to the fund, he said: "It is nice to have £18 million in the bank. We're pleased it is moving in the right direction."

The Flight-Plus licence for online and high-street retailers who ‘dynamically package’ flights with accommodation or car hire was introduced at the end of April 2012.

The CAA reported “approximately three million Flight-Plus passengers” in the 11 months to the end of March.

Moesli acknowledged some retailers may still not be complying with the regulations.

He said: "There probably are agents not complying, whether that is through ignorance it is difficult to say.

"There could be issues around the volume [of Flight Plus business]. That has always been an issue. There are sectors such as visiting friends and family where maybe we have not got the message across clearly.

"There are certain areas of the market we need to look at."

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