As the new ATOL reforms come into force today, a Transport Select Committee report agrees that the reforms do not go far enough.
The MPs argue that holiday sales by airlines and "agents for the consumer" have to be included for the system to be effective - something the industry has been fighting for.
But the committee recommends that the Government undertake research into consumers" views on whether, and in what ways, the ATOL scheme should be extended
Committee Chair Louise Ellman MP, said: "Information can be unclear and protection is patchy for passengers who book flights only; and holiday sales by airlines or some types of travel agent (agents for the consumer) remain outside the scheme."
The Assocation of Independent Tour Operators' welcomes the findings but doubts whether consumer research will help.
Director for industry issues at AITO, Noel Josephides (Sunvil Holidays) said: "AITO doubts that research with consumers, as suggested by the Transport Committee, will clarify the direction of further ATOL reform measures.
"Consumers should automatically be protected because they will usually be blissfully unaware of the risk they are taking when driven to seek the cheapest deal in the current economic climate, no matter how much time and money is spent educating them.
"Understandably, it"s only when they lose their money or become stranded abroad that they realise the heavy financial penalty that accompanies inadequate financial protection."
The Transport Select Committee also said the CAA should work with the airlines to develop a code of practice covering information for all consumers making overseas holiday or travel bookings.
It said the Government must distinguish between issues related to consumer protection and repatriation cover.
And it added that future reforms should be funded by the travel industry and must provide consumers with informed choices on protection options.
Hays Travel has become the third travel company to be approved as an Accredited Body by the UK Civil Aviation Authority.
The Sunderland-based independent has met all of the CAA"s criteria and will become an Accredited Body when reforms to the ATOL scheme come into force on Monday 30 April.
It joins Travel Counsellors and the Global Travel Group, which have also been approved.
Members of Accredited Bodies can sell ATOL protected holidays without having their own ATOL.
"The CAA thanks Hays Travel for their co-operation throughout the application process, and further announcements on additional organisations meeting the requirements to become an Accredited Body will be made in due course," said a CAA spokesman.
"Generally, we"re pleased with the progress being made so far and are looking forward to the reforms being in place from Monday. We will of course also be continuing our close work with the travel industry throughout May though, as recently confirmed in our announcement on our approach to enforcement during the first month of the reforms."
by Diane Evans and Bev Fearis
Monday, April 30, 2012