Abta demands CAA delays and consults on Atol

Abta demands CAA delays and consults on Atol

Abta reacted to the CAA announcement of new financial criteria for smaller Atol holders by demanding a delay in its introduction and seeking further consultation.

Head of financial services John de Vial (pictured) said Abta would prefer a three-year transition and to see the changes introduced alongside a new Package Travel Directive.

The CAA ruled that out in its announcement today.

De Vial declared it “unreasonable” for Atol holders to make the required changes by the October 1 start date, although only new applicants will be required to meet the criteria by then.

He said: “We supported the proposed changes to introduce stronger financial tests for all Atol holders. It’s in everyone interests for Atol holders to be strong and robust to ensure confidence in the industry.”

De Vial added: “Introducing a financial test is a logical step forward, but it’s important any such tests are proportionate to business risk.”

He said: “We’ve called on the CAA to consult with the industry, share what the proposed test might look like and consult with the industry before it is finalised. We hope this will happen before May.

“Ensuring companies have an adequate transition period to respond to the changes is vital.

“The CAA initially proposed a three-year transition and we would urge them to maintain this and provide further clarity on transition timings. It is unreasonable to expect existing Atol holders to meet these changes by October 1.”

De Vial said: “Given we expect the new [Package Travel] Directive to be published in May and that a three-year transition period was proposed, we still believe these changes could and should be synchronised with the new Directive and review of the Atol scheme.”

He went on: “We’re pleased to see the proposed £75,000 minimum bond has been reduced to £50,000. However, we still believe this is set too high and believe it counterproductive in encouraging microbusinesses and SMEs from entering the industry.

“The standard bond calculation is 15% of turnover. The vast majority of SBA holders have a turnover under that required to justify a £50,000 bond.

“This means most SBA holders would be bonded at a higher rate than any other Atol holders.”

De Vial said: “We’re pleased to see the SBA has been maintained and we are supportive of the introduction of minimum share capital.

“However, we are concerned that this should be proportional to the scale of the business and that there be clear transition arrangements in place for existing Atol holders.

“The introduction of a cap on turnover for SBAs makes sense as this is where the financial risk is. It is likely to mean a few SBA holders will need to apply for a standard Atol.”


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