ATT forecasts tough times ahead
Some 25 ATOL protected travel companies failed in the last financial year, according to the Air Travel Trust’s annual report published today.
The report also said that its records show that there has been an increase in the number of ATOL holder failures in the first four months of the year.
The ATT said that 12 of the companies that failed in the year to March 31 2008 needed to call on its funds but this cost only £400,000, compared to the £3.3 million it had to spend in the previous tax year.
This is because the Trust could use cash saved from previous years when less money was needed than anticipated for failing companies.
However, the report showed that the ATT has a current deficit of £21 million. This, it said, was being addressed by the CAA’s new reform programme which has introduced the ATOL Protection Contribution (APC). This new legislation gave powers to the ATT to collect money direct from ATOL holders and replaced the old bonding scheme from April 1. A financial restructuring of the ATT has also been undertaken.
Monthly payments to the ATT started in early June, based on bookings taken by ATOL holders during April. The ATT says that the level of bookings reported to date show the market for summer 2008 held up well, although there has been an increase in the number of ATOL holder failures in the first four months of the year.
Chairman Roger Mountford said: “Whilst the current level of bookings for summer 2008 is broadly in line with forecasts, the signs for 2009 are less clear cut. An increase in the number of insolvencies is an indicator of tougher trading conditions and may be an indication of a further deterioration later this year.”
By Dinah Hatch
Dinah
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