The Civil Aviation Authority (CAA) has opened a consultation on moving ATOL protection over to trust arrangements and introducing different rates of ATOL protection contributions (APC) for holiday bookings. The intention behind these changes to ATOL, according to the consultation document, is to segregate customer advance payments for businesses with trust and escrow accounts.

What Are the Changes to ATOL That the CAA are Proposing?

The APC, which funds the Air Travel Trust (ATT) for refunds to consumers where an ATOL holder fails to, currently costs £2.50 per passenger across the board. Now, from the results of this consultation, we could be looking at different prices based on how the business segregates consumer money, whether fully or partially. The consultation has highlighted the benefit of this scheme in light of the companies that use advance funds before the consumer has had their holiday – a method that can propose risks for the consumer’s financial protection.

Though the CAA has warned that this consultation will not be the last, and that another should be expected to take place early next year, the authority’s proposal of direct protection of consumers’ monies and the financial resilience of the ATOL scheme is looking very optimistic for those in trust accounts. It is also a huge step towards strengthening the UK travel industry by protecting both consumers and travel businesses. The CAA are also considering whether pipeline monies that travel agents get on behalf of ATOL holders should be segregated in extension of this. We still don’t know if the general price per passenger will increase, but this is expected by those in the travel industry, especially in light of the Thomas Cook situation which significantly drained the ATT fund’s monies.

Given the impact that COVID has had on the travel industry, there has never been a better time to introduce this improved protection, to the benefit of those that fully segregate consumer funds, as the price could be much higher without doing so. They have also stated that the costs could vary further based on the financial risk a company presents, following assessment from the CAA and based on the value of a trip. For example, the difference in value between luxury travel and a day out.

What Does This Mean For PTS?

Because of this news, and in anticipation of the consultation’s close date on the 30th of July, there has never been a better time to consider becoming a member of PTS. As a trust account provider, PTS will benefit from the full effects of this discussion and any consequent changes to ATOL protection. It allows us to provide even better protection to both the travel company and the consumer alike, and will ensure even further confidence in our services in the face of the travel industry’s recovery from COVID-19. This new development means a lot to our team. We are already welcoming hundreds of new members, and are preparing for the predicted boom in travel over the coming months as restrictions are lifted. The power of a well managed trust account is shining through and will undoubtedly strengthen PTS’ members positions.

To find out more, visit the announcement in Travel Weekly, or to have your say and contribute to the consultation, visit the CAA Consultation Hub. To find out how we can assist your travel business with a trust account solution, please visit our trust account solution page. Alternatively, if you would like to speak to a member of our helpful team, please call us on 0207 190 9988, or send an email to We look forward to hearing from you.

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