By David Moesli, deputy director of consumer protection at the CAA
Many of you may groan inwardly when you realise that this article is all about regulation.
And with the introduction of Flight-Plus, Atol Certificates, agency agreements and accredited bodies as part of the extensive Atol reform changes in 2012, I’m sure you’ll also be asking why regulatory change is still on the travel industry agenda?
There are two ways of answering that question.
First, Brussels has been promising to propose changes to the Package Travel Directive for some years and we’ve now just seen the results of their deliberations.
The UK travel industry interest has been all around how the proposals will impact on Flight-Plus sales and this is obviously important to a lot of firms, both big and small.
The arguments in this area have already been well rehearsed in the travel press, so I won’t repeat them here, as my objective is to remind you of another document which deserves your attention.
This document is, in my view, of at least equal and probably more immediate importance and it is the Department for Transports “Review of Package Travel Directive and Atol Implementation and Funding Arrangements: Call for Evidence”.
This rather lengthy title spells out exactly what this document covers and it is in effect the next part of the government’s programme of reform of Atol.
Now, whilst this is not a consultation, it is the first stage of a process that is expected to lead to a consultation and potentially major regulatory change in due course.
So it’s vital that you play a part in this process as this is the stage when the shape of future options will start to get narrowed down.
As part of the exercise the department is seeking feedback on the costs of meeting various forms of financial protection and it is important to get real data from the industry on the table.
So, what are you asked to give evidence on?
Well, the key objectives of the government are to put the financial protection arrangements for the travel industry onto a robust basis, with industry taking more responsibility for protecting its own customers’ money and establishing arrangements where the government’s own financial exposure to travel failures is reduced.
Consequently, the DfT asks questions about how the financial protection system should be organised, whether current arrangements can be simplified and importantly what the cost implications are for the industry.
We know that many people in the trade have firm views on these issues and this is the chance to comment on questions such as: are there cost reductions and benefits to be gained by reducing overlapping layers of protection between Atol requirements, credit cards and travel insurance?
Have the separate financial protection regimes for air holidays and for “non-air” holidays affected business costs and if so what changes should take place?
If a central reserve fund were to continue, would you prefer a mechanism with a flat rate which was simple to administer, or a more complex mechanism that reflected the cost of holidays or the risk profile of operators?
Are there elements of the approach to financial protection in other EU States that could make the UK regime more effective?
What would be the pros and cons of reverting to the use of insurance or bonds to cover the costs of insolvencies?
These are just a few examples of the big questions and the answers have the potential to impact significantly on all travel firms in the not too distant future.
We at CAA are very aware that the main industry trade bodies are all looking to respond to the DfT’s deadline of August 15, but for many individual businesses the debate is still not well understood.
If you are one of those businesses, this really is the time to take in the document and consider what changes you want to see in the future.
Now clearly the “Call” is not your ideal summer holiday reading, but at 19 pages (excluding annexes) it is modest by Government standards and I urge you to take up this chance to make sure your voice is heard.
It is certainly true that there have been a lot of changes to Atol in recent months and I know that many of you feel that it’s important to allow these changes to bed in properly, but this latest process is all about making sure that future changes are the ones that business and consumers want to see.
The eventual outcome could potentially impact on your long term business plan and the fundamental future of this vibrant industry, so it really is an opportunity you cannot afford to miss.
The DfT has invited all in the trade to contribute to the debate, so if you have evidence on the costs of your own business that are relevant to the debate, or have views on how moving towards the Government’s principles will impact on costs, do get involved because the future of financial protection is starting now.
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