Unpacking the ATOL Consultation

Unpacking the ATOL Consultation

This month, the CAA finally released its Consultation on ATOL funding arrangements and the protection of customer money. Its draft proposals have far-reaching consequences for the whole travel industry. In this video, TTC director Martin outlines the key options being considered, including the proposals to reduce reliance on customer money and implement risk-based APC. The deadline for responding to the Consultation is the 30 July 2021. Make sure you have your say!

Video highlights

• The CAA is looking to take a more systematic approach to ATOL holder risk and to encourage and incentivise ATOL holders to reduce their reliance on customer money.
• The document makes several broad assertions:
– Travel companies are thinly capitalised
– Companies who segregate money fared better during the pandemic
– A flat £2.50 APC underprices risk for some companies (1:40)

• The CAA has set out a series of different options:
– Option A – mandatory framework (3:26)
– Option B – tailored framework (5:03)
– Option C – risk-based APC (5:43)
– Option D – the open market solution (7:33)

• There are key questions around:
– Transition arrangements
– Airline Insolvency Bill
– Breadth of Consultation
– Prioritise simplicity
– Agency model (8:50)

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