Reform in the Atol scheme is becoming a pressing issue within the travel industry, as evidenced by the recent discussions at the Future of Travel Conference.
- Michael Budge, head of Atol at CAA, remains optimistic that a consultation on reform proposals will proceed in 2025.
- The initial reform plans, launched in 2021, faced delays attributed to the complexity of required changes and industry feedback.
- Simon Bunce from Abta questions the necessity of further Atol reforms, citing industry’s self-driven segregation measures.
- The evolving market landscape post-Thomas Cook and COVID-19 continues to shape regulatory needs and strategies.
Reform in the Atol scheme is becoming a pressing issue within the travel industry, as evidenced by the recent discussions at the Future of Travel Conference. The head of Atol at the Civil Aviation Authority (CAA), Michael Budge, expressed hope at the conference that the Department for Transport will sign off on a consultation for reform proposals by next year. His comments underscore the industry’s need for certainty and clarity amidst ongoing regulatory developments.
Budge acknowledged that while there is little likelihood of progress before the end of this year, there is a definite intent to push for a consultation on final proposals in 2025. The reform initially introduced in April 2021, targeted updating the Atol consumer financial protection scheme. However, its timeline has been affected by the detailed and demanding nature of addressing industry responses and the CAA’s Request for Further Information issued in January 2023.
Questioning the necessity of these reforms, Simon Bunce, head of legal affairs at Abta, observed that many travel businesses have already started segregating customer monies from their business accounts following the industry’s first consultation. Bunce stated, “A lot of businesses have seen the direction of travel and started putting those [segregation] measures in place anyway, so I question whether the CAA needs to do anything more formal and structural in light of what has happened since that first consultation came out.” This internal move by businesses suggests a potential redundancy in the proposed formal reforms.
Despite uncertain timelines, Budge noted that the power to move forward with reform lies with the government, which could result in significant changes depending on its regulatory direction. He stated, “We have a new government, and we have to understand their direction of travel and where they want to position things moving forward.” His remarks highlighted the challenges of finalising regulatory responses in a post-COVID and post-Thomas Cook market landscape, where some businesses still face challenges while others have stabilised.
The Atol reform discourse captured at the Future of Travel Conference elucidates the broader challenges facing the travel industry with regard to regulatory stability and adaptation. Budge emphasised the importance of reflecting on current market realities to shape an effective regulatory response, suggesting that the government’s decision will be crucial in determining the future direction of the Atol reform.
The regulatory direction for the Atol scheme remains in the balance, dependent on governmental decisions in the coming year.
