Groundhog Day!

After much preamble, in April 2021 the CAA launched the ATOL consultation to address the issue that part of the UK travel industry had become addicted to spending money that wasn’t theirs.

We have records of senior people at the CAA telling us this process would be complete by the end of 2022.

20 months seemed a long time given this was clearly right for consumers and safeguarding pipeline monies was long established in other industries. The Treasury/Tax-payers are also on the hook for any shortfall in the ATT. The Thomas Cook failure in September 2019 was a recent reminder of what happens when companies are allowed to misappropriate Client pre-payments. The Thomas Cook Bond was for £1M, yet they failed with liabilities of £9 Billion! Hundreds of Millions of which were covered by the ATT and tens of millions more paid by the unwitting tax-payer.

Over the last 33 months every deadline set by the CAA for ATOL reform have been missed.

The CAA and DFT announced this week that there will be further delay as it’s ‘difficult’. Wisely perhaps, they do not set a new target date for the end of embezzlement in travel – as you can’t miss a target you don’t set. The groundhog has returned to its burrow and the winter of inertia and procrastination continues.

Meanwhile Luxtripper failed in October 2023 with a reported £11.9M owing, which the ATT, (funded by the industry) will be responsible for. Astonishingly Luxtripper ran out of money just 3 weeks after their ATOL licence renewal and could not even pay their staff. It appears that the ATOL was renewed without audited accountand many millions of Client money already mis-spent as ‘working capital’. We had understood the CAA have a rule that 70% of Client money must be retained, but that rule appears to have been neglected.

Trustpilot reviews highlight that even before the 30 September ATOL renewal Luxtripper were not paying suppliers. The ATOL scrutiny was delinquent.

uk.trustpilot.com/review/luxtripper.co.uk

Had the ATOL reform been completed by the end of 2022 it is still possible Luxtripper would have failed, however the burden to the ATT would have been far less.

We believe no company that has safeguarded Client money in Trust has ever been a cost to the ATT. Many ATOL holders already keep Client money in escrow or trust, separate from their own funds: It is not difficult to prevent these harmful failures. QED.

The people who lose their holiday and have to wait months to get their money back are rather forgotten. For many they are denied their holiday, with no reserves to pay twice.

The CAA and DFT’s continued delay hurts the public and the travel industry. The extraordinary reluctance to ensure proper regulation has now moved from incompetence to scandalous. They employ a bloated staff who permit themselves to work from home and seem accountable to no one.