Travel Network Group welcomes ‘reasonable’ CAA Atol decision

Travel Network Group welcomes ‘reasonable’ CAA Atol decision

The Travel Network Group has described the Civil Aviation Authority’s changes to the Small Business Atol as “reasonable” even through the consortium wanted the scheme axed.

Managing director Gary Lewis (pictured) said the announcement by the regulator shows that the CAA had listened to the views of the industry and acted accordingly.

“We welcome further regulation to reduce the risk which the Small Business Atol scheme poses to the Air Travel Trust Fund and, whilst we believe that the CAA should have gone further and abolished the SBA scheme, the confirmed changes are a reasonable approach to addressing the issue,” he said.

“The franchise Atol scheme operated by the TTA, known as T-Atol, remains unaffected by these changes. This T-Atol does not require any paid up share capital or bonding and therefore we hope to welcome enquiries from businesses seeking an alternative to the standard Atol and Small Business Atol.

“TTA has over 20 years of experience in this area and provides a robust solution to all both new entrants and established travel businesses in this important area.”

The group has communicated to its Worldchoice members who are already SBA holders and informed them that they will remain unaffected by the announcement providing that they have less than £1 million in licensable turnover, carry no more than 500 passengers and can pass a newly introduced solvency test.

For members who fall outside of this criteria, they have been told to speak with the group to explore other options.

Abta head of financial protection John de Vial said: “We support the changes to introduce more sophisticated financial tests for Atol holders, particularly for SBAs where there were none, it’s in everyone’s interests for Atol holders to be strong and robust companies to ensure confidence in the industry.”

He added: “Introducing a financial test for all Atol holders makes sense but it is important that the new tests are proportionate to business risk.

“We called on the CAA to consult with the industry and share what the proposed tests might look like and we hope that this will happen before they are finalised – they were not included in the June 2014 consultation or the CAA decision document published today, which acknowledges that the regulatory cost impact assessment cannot be completed without knowing what the tests are.

“We are pleased to see that the proposed minimum Bond for new Atol holders, including SBAs, has been reduced from £75,000 to £50,000.

“However, this is still £10,000 higher than the current minimum bond for a standard Atol.

“Our data shows that this would over-bond (compared to a standard 15% bonding rate for new Atols) more than one third of all Atol holders and nearly two thirds of SBA Atol holders.

“We think that this is unnecessary and contrary to Government policy in relation to supporting competition and new business start-ups, particularly SMEs and microbusinesses.”


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