Gary Lewis is group managing director of The Travel Network Group, the parent company of Travel Trust Association. He is also a member of Atipac, the committee that advises the trustees and government minister in charge of the Air Travel Trust Fund.
I think I might run an “Abta – Pack it in” campaign along the lines of the CAA “Atol Pack peace of mind” campaign. I will run the headline every time I think Abta has played fast and loose with their interpretation of a decision by the CAA.
We have a mantra in my business: understand the problem first then the solution will show itself.
But when you start to implement a solution, that’s when the fun begins, because it is then you discover the ideology, politics, agendas, excuses, delays, blame and the denial by people who don’t want change. They want to keep the status quo, even when it is to the detriment of the business.
I call it the old boys’ network – men and women, but in my experience mostly men – that have their own personal reasons for not wanting change.
Last week the CAA announced it wouldn’t be scrapping the Small Business Atol (SBA).
This was a reverse of their original position, but to quote Andy Cohen, head of Atol, they have “arrived at a package of measures where genuinely small businesses can continue to utilise the SBA category, but where no business can offer Atol protection without having gone through a financial test proportionate to their size.”
While I wanted the CAA to go further with what they have put in place, “a financial test proportionate to their size” does go a long way to fixing the problem.
That problem is a continual stream of poorly run businesses, without financial discipline, holding ‘fig leaf’ Atol licenses, taking increasingly greater risks to make their businesses work and when they fail costing the Air Travel Trust Fund (ATTF).
Since the introduction of the APC in 2008 for SBAs, they have cost the ATTF a total of £6.2 million. During the same period the ATTF only received £2.2 million in APC contributions.
And therein lies the issue. So now let me ask the question to you, how should we have fixed the problem?
The CAA is not saying that all SBA’s are failing. They are not denying that a standard Atol holder will cost more when they fail. They are also not denying that future changes to the Package Travel Regulations and the way Atol is run could potentially make all these decisions irrelevant.
But are these sufficient reasons to keep the status quo? Are these reasons not to fix the problem we all understand and fix it quickly? Of course not, and to offer anything other suggests you have an agenda. You’d be accused of playing politics or trying to appease a part of your business when it is the wrong thing to do for another part.
That is called politics, I understand it, I have done it myself but sometimes you need to be called on it when you are representing us all in the eyes of the government.
I was asked in a forum last week why we are not very good at coming together as an industry and lobbying on the important issues. It is because we are fragmented and all have different agendas and this simple decision that we should take as an industry sums this up.
The CAA, as a regulator has shown themselves to be tough, flexible, entrepreneurial and unpopular, whether we like them or not, the fact is they have fixed a lot of problems.
They removed bonding as the prevailing methodology of financial protection, which many of us railed against as it changed the way we understood our world.
Yet we could all see that bonds perpetuated a huge hole in the ATTF and allowed serial offenders to keep reinventing themselves only to re-offend. They have introduced APC and created a surplus in the ATTF for the first time in my whole career.
They have introduced the Atol franchise, which allows my organisation, the Travel Trust Association, to issue Atol licenses on their behalf removing risk from the ATTF.
And, based on this success, they have then created the opportunities for accredited bodies that try and do what the Travel Trust Association has been doing for 20 years. I didn’t like this as it challenged my model but it was the right thing to have done.
Flight-plus was forced through to address the exposure created by dynamic packaging and bring a huge range of companies back under Atol protection. All in all, the CAA has clearly tried to continually fix the problems.
Now ask yourself – what position has Abta taken on many of these issues?
Of course the CAA get things wrong and Abta also gets things right. I am not taking away from Abta some of the incredible things it has done for our industry when it has really understood the issues facing it and demonstrated clear and decisive leadership.
We as an industry would get a lot more done, a lot more credit, if our biggest trade body and our main regulator were just fixing the problems, not trying to appease all the agendas that exist within our fractured industry.
As an industry, if we want to stay relevant, attract first class employees, remain competitive within the world we compete in, we have to move faster than the world is moving around us.
It is the same for the people who adapt the regulatory framework our industry operates within, and it is why I will always back the problem fixers.
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