CAA freezes ATOL charges
The Civil Aviation Authority has announced that its Consumer Protection Group will be freezing its fees to ATOL holders during the next financial year.
Helen Simpson (pictured), Director of the Consumer Protection Group, said: “We have to cover our costs, and we usually need to increase our fees to reflect a higher workload as well as inflationary cost increases – although the rises have always been within the rate of inflation.
“This year we’ve been particularly aware of the financial pressures on travel firms and we made an extra effort to limit any increase as far as possible.
“We left the process of setting charges as late as possible so as to get the best picture possible of volume in licences, and at the same time we looked at our own costs closely and we made some savings in our budget. As a consequence of this process we concluded that we could hold ATOL rates at their present level until either April or June 2003.”
Notes
The ATOL protection scheme is financed by charges paid by ATOL holders and there are currently some 1,800 licensed companies. Annual charges cover licence applications, renewals and variations plus a variable charge relating to the number of passengers the company is licensed to carry. For example, an ATOL holder currently pays £470 for the renewal of its licence plus 10.15 pence per seat licensed. The fees last increased by 2 per cent in April 2001.
ATOL is managed by the CAA and gives comprehensive protection from losing money or being stranded abroad to people in the UK who buy air holidays and flights from tour operators each year. It is by far the largest travel protection scheme in the UK, and the only one for flights and air holidays sold by tour operators.
All tour operators selling flights and air holidays must hold a licence from the CAA. Before it gets a licence each operator is examined to ensure it is properly managed and financially sound, and it must lodge a bond – a financial guarantee provided by a bank or insurance company. If it fails, the CAA then uses the money to pay for people abroad to continue their holidays and to travel home as planned, and to make refunds to those who have paid but not travelled. If the bond is not enough, any shortfall is met by the Air Travel Trust Fund, which is managed by the CAA and backs up the individual bonds.
In the last five years, ATOL has managed 115 tour operator failures, rescuing 53,000 people from being stranded and giving refunds to a further 139,000 people at a total c
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