CAA ‘underestimating risk of holiday company failure’
The Civil Aviation Authority should raise its proposed customer levy from £1 to £1.50 due to the risk of holiday companies going bust.
The call came from the Co-operative Travel Trading Group in its response to the authority’s consultation into replacing bonding.
CTTG suggests that the £1 levy be raised to £1.50 for at least the first two years, so that the back-up Air Travel Trust Fund is better placed sooner to cope with company failures.
The group said it was “concerned that given the current competitive state of the travel market, the CAA may have underestimated the potential risk of company failure and suggests that the levy should be set at £1.50 instead of £1.00 in the short term to replenish the ATTF more quickly”.
It also suggests that any levy should be backed up with a strong nationwide publicity campaign if the scheme is to be truly effective.
In its response to the CAA consultation on the issue, CTTG said:
· It is inevitable that travel businesses will pass on the charge to
consumers “given the meagre margins on which the industry is based”.
· A strong nationwide publicity campaign, aimed at consumers and extolling the benefits of booking an ATOL protected holiday, is fundamental to the scheme’s future success. In circumstances where the travel market is price driven and holiday costs are already subject to a number of taxes and supplementary charges, it will be essential, adds CTTG, to ensure that customers understand why they are being asked to pay extra. Given that in the long term, changes to the ATTF will save the Government money, it does not seem unreasonable to expect it to pay all or part of the cost of this campaign.
· That the levy should be extended to include all elements of travel arrangements including scheduled airline tickets and accommodation-only booking.
· That the CAA needs to be clearer on how firms at high risk of failure will be assessed and monitored.
· Clarity is also needed on what will happen in circumstances where the levy is included in the overall invoice to holidaymakers, who subsequently do not travel.
Chief operating officer Mike Greenacre said of CTTG: “CTTG has long supported the idea of a levy to replace current bonding arrangements. As a group of unique consumer-owned businesses, we want to ensure that consumers are fully aware of the protection this new proposed system will offer.”
by Phil Davies
Phil Davies
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