ATOL Protection – Good News for Holidaymakers

The government has confirmed that plans are in the works to provide holidaymakers with better protection against financial loss in the event of failure of a travel company.

The ATOL insurance scheme (Air Travel Organisers’ Licensing) is to receive a much needed update and overhaul designed to provide better protection to holidaymakers.

This is welcome news indeed, especially for those who prefer to purchase their flights and accommodation separately online (the so-called DIY holiday), rather than purchasing a package holiday. At the moment the ATOL scheme only covers those on package holidays or travelling on chartered flights.

Travel companies will also be required to give clearer information to customers regarding ATOL protection. This should help to prevent the problem of customers purchasing a holiday that they believe is a package holiday when legally it is not and therefore not covered under ATOL.

The government is looking for ways to cut the deficit and lessen the burden on the taxpayer. Currently, ATOL licensed businesses pay £2.50 for each booking, which goes into a fund to cover a travel company collapse. (This amount was increased from £1.00 to £2.50 in 2009). The funds are used to refund or repatriate customers stranded overseas – which can be a costly business. The Civil Aviation Authority (CAA) runs the scheme and issues the licenses.

The government will be consulting with member of the travel industry in the next few months and it is anticipated that changes will be implemented by the end of this year – hopefully, in time for the peak 2012 summer holiday booking period. Airlines are currently exempt from having to hold an ATOL license, but any package holidays sold by them must be protected.

Where the unwary customer often gets into trouble, as things stand at the moment, is when they purchase a holiday from a tour operator where the flight and accommodation are purchased separately on the customer’s behalf. What the customer may not be aware of, and may not be told, is that this type of arrangement is not legally a ‘package holiday’ and therefore does not carry ATOL protection.

For more information, and to check whether your tour operator is ATOL licensed, visit the CAA website – click here. Or visit the Department for Transport Website (dft.gov.uk).

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