Deja Vu...

The 16 January article in Travel Weekly regarding the collapse of Dream World suggests those running the ATOL scheme and the trustees of the Air Travel Trust (ATT) learned nothing from the Thomas Cook failure in 2019.

Dream World collapsed owing £10.2 million and with just £25,000 in assets remaining. Based on the size of the claim on the ATT, Dream World were entrusted with £6.1M of Client money for holidays not yet delivered. Once a Travel Organiser starts embezzling this Client money surely the CAA must deem them to be trading whilst insolvent.

Travel companies that safeguard money in Trust or Escrow have not been a drain on the ATT. A lucid financial regulator would make that a condition of licence.

4 Questions:

- Why do the ATOL arm of the CAA continue to permit Travel Organisers to misappropriate Client money as ‘working capital’ when their Client has a legitimate expectation that their money will be safeguarded to pay for their holiday?

- Once a Travel Organiser is trading whilst insolvent, why do the CAA allow them to continue to hold an ATOL licence, continuing to accept bookings?

- It is not right that should travel companies who safeguard Client money, pay tens of millions each year into the ATT to subsidise the failure of companies which should not have been granted ATOL licence. Why is there scant accounting for risk?

- Why has the long overdue ATOL reform, which could resolve this, been habitually delayed at every stage?