ATOL funding may increase from October

April 27: The UK Civil Aviation Authority (CAA) published a consultation document on the future level of the ATOL Protection Contribution (APC) that should be paid by tour operators to protect holidaymakers.

It is proposed that an increase from the current level of £1 per passenger will ensure that the ATOL Scheme continues to provide effective financial protection for holidaymakers – the rate paid by tour operators would be £3 per passenger from October 1, 2009. The CAA believes it offers a reasonable balance between setting the rate as low as possible while providing resilience in the current period of economic uncertainty.

The fall in air passenger numbers and the failure of the XL Leisure Group in the UK have brought about the need for changes to the rate of APC, according to the CAA. Previous industry bookings estimates, on which the current APC rate was based, are forecast to drop significantly as a result of the recession, directly affecting the income of the Air Travel Trust Fund (ATTF). In addition, the failure of XL, which was the UK’s third largest tour operator when it collapsed in September 2008, has affected forecasts of ATTF expenditure.

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