Further input to the ATOL consultation

This prompted by misleading and erroneous commentary from Rachel Jordan and Alan Bowen, neither of whom have ever been responsible for running a travel operation so far as we know.

The Industry grew up with the notion that pipeline monies paid for a specific travel contract can be used as ‘cash flow’ and became addicted to embezzlement so to reduce appropriate capitalisation.

Some elements so want to keep this convenient modus operandi rather than adopt the ethics of Escrow Accounting they resort to specious and unfounded argument.

Escrow Accounting is straight forward and empiric while Trust Accounting through institutions such as the Travel Trust Association is polished and well established. The rightful and specific onward payments executed at due point from the segregated funds. The largest of these is the BSP payment with no more than 14 days grace from ticketing. Refunds also honoured within 14 days as the travellers money has not been misappropriated.

ABTA originally served the industry and travellers well by setting standards but have not moved with the times. They cling on to their fast declining membership with biased argument against the ethics of Escrow Accounting.

The CAA need to tier their regulations appropriate to the risk and adopt different strategies to fund the ATT. There are three fundamentally different areas of operation.

Retail Travel Organisers – who make up the vast majority of ATOL’s (Such as Dial A Flight, Flight Centre & Trailfinders etc etc)

Tour Operators with their own airline – where the greatest risk exists including the cost of repatriation (Tui, Jet 2 Holidays, BA Holidays, Virgin Holidays, Emirates Holidays & Jet 2 Holidays et al).

Airlines when selling flight only

The historic funding of the ATT does not allow for levels of risk so even those who have voluntarily adopted the ultimate de minimis Trust Accounts are obliged, as things stand, to pay for the failure of their mismanaged competitors. The tax payer is also burdened with repatriation costs.

Those failing to segregate must be called to account.

The CAA (DfT) set an appalling example with the ATT account unpublished.