ABTA reveals details of scheme to save agents time and money
ABTA has revealed details of a combined bonding facility being offered to members under the ABTA-ATOL Joint Administration Scheme.
The Association says the scheme will allow agencies to cut the cost of complying with new Flight Plus regulations that come into force on April 30.
It will allow agents to meet their bonding requirements through a combined retail and principal bond, held by ABTA.
The facility will allow travel agents to meet their total bonding requirements through a combined retail and principal Bond, held by ABTA.
Under the new regulations, the CAA will require agents to have a first year bond to cover £40,000 or 15% of turnover, whichever is the greater.
ABTA is offering qualifying members the option to reduce their bond to a minimum of 8% of ATOL turnover and replace the difference with an ATOL Bond Replacement Scheme Insurance premium, paid to ABTA Insurance PCC Ltd.
ABTA said this would also save on administration as members won’t have to apply for a separate CAA bond. Also, no separate security or personal guarantees will be required by ABTA Insurance PCC Ltd.
ABTA head of financial protection John de Vial said: "This scheme provides our members with greater flexibility and a choice as to how they secure the most cost-effective bonding arrangements.
"It will ease the administrative burden of ATOL compliance for participating businesses and, for many give the opportunity of reducing the overall bonding costs."
As an example, the normal minimum ABTA retail bond requirement is £25,000 and the minimum CAA ATOL bond requirement is £40,000, resulting in a total bond requirement of £65,000. ABTA plans to offer qualifying Members a choice of either:-
- providing a new, combined bond, for the £65,000, or
- a reduced combined bond of £40,000, plus an insurance premium for entry to the ATOL Bond Replacement Scheme in respect of the £25,000 reduction in bond required. The premium will be quoted by the ABTA Insurance PCC following a review of the member’s ABTA-ATOL application and financials.
The CAA reserve the right to require bonds in excess of 15%, for example, in the case of unusual business patterns. The financial security required by the CAA for the ATOL scheme is normally reduced annually on renewal, so that it is removed after four years, subject to CAA approval.
ABTA said the JAS scheme was aimed at businesses with a turnover of less than £1.5m.
All members will shortly receive an application pack for the scheme and those interested are being urged to sign up as soon as possible in order to meet the CAA deadlines for compliance.
By Linsey McNeill
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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