The Air Travel Trust fund which underwrites the Atol scheme has a current balance of £35 million despite the double whammy of the industry’s biggest-ever failure and the Covid crisis.
The CAA confirmed the Air Travel Trust fund is in credit as it issued the trust’s accounts for the 12 months to March 2019 on Monday following a delay of more than a year.
The government is committed to underwrite any pay-outs for Atol failures above the amount in the trust, which accumulates funds from the Atol Protection Contribution of £2.50 paid on each Atol-protected booking.
The accounts reveal the cost to the trust of Thomas Cook’s failure in September 2019 will come to £250 million “net of proceeds from the insurance policy” which provided additional cover.
This sum comprises the costs of repatriation and refunds already paid.
The accounts reveal the insurance policy expired in March 2020 and “could not be renewed as there was no available capacity in the insurance market” due to the failure of Thomas Cook and the Covid pandemic.
However, the government confirmed it would underwrite the Air Travel Trust in July this year, when the government and CAA also confirmed the financial protection of refund credit notes issued for Atol bookings cancelled due to Covid.
The 2018-19 accounts reveal the trust had net assets of £221 million at the end of March last year.
The balance of £35 million in cash was available on the date the accounts were signed last week, free of any borrowing. The fund has an additional £75 million available in credit facilities.
Publication of the trust’s 2018-19 accounts was held up by the drawn-out crisis at Thomas Cook, which ended with the group going into liquidation in September 2019.
Release of the accounts was then further delayed by the Covid-19 crisis.
The accounts note the Atol Protection Contribution (APC) income on Atol bookings has been about one third of the expected amount since the onset of Covid-19 in March.
The report notes 28 Atol failures since April 2019, excluding Thomas Cook, are expected to cost about £33 million.
The trust accounts for the financial year to March 2020 are expected to be published within weeks.
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