Air Travel Trust Fund dives £20m into the red
The back-up Air Travel Trust passenger protection fund plunged further into the red in the last financial year.
The main call on the trust came with the failure of Tapestry Holidays which led to a call on the trust of more than £2.5 million.
More than 1,400 holidaymakers had to be repatriated and a further 2,700 refunded, at a total cost of £4.2 million. Tapestry carried an ATOL bond of only £1.7 million.
The 2007 report and accounts of the Air Travel Trust published today show the year-end deficit increased from £15.8 million to £20.1 million.
However, a credit facility is in force, secured by a Government guarantee of £31 million.
The heightened deficit followed an increased number of ATOL company failures in the year to March 31. The number of company collapses rose by two to 27 but only five involved a call on the trust.
Total trust expenditure on these failures amounted to £3.3 million, a decline of nearly £1.5 million compared with the previous year, according to the report.
But the trust has no income and interest charges on its borrowing facility in the current year amounted to £0.9 million.
Chairman Roger Mountfield said the trust in combination with ATOL bonds, enabled more than 3,000 holidaymakers to return home and refunded almost 55,000 who would have ben left out of pocket without the protection scheme.
The Civil Aviation Act gained Royal Assent in November 2006 and this will provide powers to replenish Trust fund though a levy.
The trustees have welcomed the proposal to introduce a £1 per apssenger ‘ATOL Protection Contribution’ on ATOL bookings from April 1, 2008 to replace ATOL bonds.
Subject to a Government decision on the proposal, this would build up a new protection system and enable the fund to be replenished.
Following a number of large calls on the fund during the early 1990s, it first went into the red in 1996.
The Air Travel Trust provides back-up funding to the ATOL system, which is managed by the Civil Aviation Authority.
by Phil Davies
Phil Davies
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