The Air Travel Insolvency Protection Advisory Committee (ATIPAC) has voiced its support for a £1 ATOL levy to ease the burden on the travel industry.

Its call came as its annual report showed 27 ATOL-holding travel companies collapsed in the year ending March 31, two more than in the previous year.

The largest failure was HCCT Holidays Ltd in December 2006, when the CAA repatriated 800 passengers and refunded 40,000 others at a cost of just over £5 million.

The failure of Tapestry Holidays is estimated to have cost around£4.2m, with a call on the Air Travel Trust Fund of around £2.5million (see separate story).

Total expenditure on claims and repatriations was £14.2 million, of which £3.2 million was provided by the ATTF. This increased the fund's deficit to £20,055,252.

ATIPAC believes a £1 levy will reduce costs and a significant part of the regulatory burden for the travel industry.

It also argues it would be an important opportunity to help educate consumers about the benefits of financial protection and which travel products are protected.

ATIPAC chairman John Cox said: "The past year has seen a further decline in the number of air travellers that are financially protected and there is still consumer confusion about whether or not the flights and holidays they purchase are protected.

"The committee believes that the introduction of the APC would be a golden opportunity to increase consumer awareness by having clear statements on advertising and invoices when products are financially protected. This information should also be complemented by an appropriate and effective consumer awareness campaign.

"Even though the introduction of reform in ATOL bonding would not cover all air travellers, the Committee welcomes the current proposals as a step in the right direction. We urge the Government to respond positively to the outcome of the consultation as soon as possible."

ATIPAC was established by the Secretary of State for Transport in 2000 to keep under review and provide advice to the Civil Aviation Authority, the Trustees of the Air Travel Trust and the Secretary of State for Transport on the financial protection arrangements for air travellers.

The committee's members include representatives of all the main travel trade bodies and an equal number of independent and consumer representatives, as well as the CAA.


By Bev Fearis