According to recent reports this week, the Air Travel Trust (ATT), the trust which underwrites the consumer protection programme for ATOL, is in credit for around £108 million in 2023, despite the great impact and pay-out from the combined Thomas Cook and Covid Pandemic issues in 2019 and 2020.
Following the Thomas Cook failure in 2019, the Air Travel Trust paid £444 million as a result of the downfall of a huge business. Following this, the Covid pandemic took a huge hit on the travel industry, with the ATT expected to be needed to pay out drastic amounts of money for claims. However, following the CAA’s revealed annual report for the Air Travel Trust finally being issued concerning March 2020 until March 2021, many were pleasantly surprised by the healthy balance that the ATT has retained following the pandemic.
According to the released report, 34 different ATOL holders failed between March 2020 and March 2021. This came out as over 4 times the number for the previous year preceding the pandemic, and the highest number of ATOL failures since the financial crisis of September 2008.
The report estimates that the claims from the Air Travel Trust during the Covid pandemic and as a result of the 34 failures came to a total of nearly £11.4 million. This brings into account that 8 of the 34 failures cost the Air Travel Trust nothing due to 4 bonds of a sufficient size that were provided, 3 businesses that were managed by their ATOL Franchises, and 1 business that had no claims.
The biggest failure, according to the report, came from STA Travel in August of 2020, a business that ceased trading with nearly 32,000 clients that were still owed their refunds. The business provided a £7.8 million bond that left the remaining £2.8 million of claims up to the Air Travel Trust.
Over the course of the pandemic’s pea in 2020 and 2021, the Air Travel Trust was reported as receiving over £20 million in ATOL Protection Contribution (APC) payments, this coming during a period in which the travel industry was greatly restricted against any sort of movement.
Following this, the ATT reported that the APC payments that came in following the end of the 2020-2021 financial year came to around two-thirds of the pre-pandemic levels, boosting the ATT’s reserves up to £108 million on the date that the accounts were signed off on Friday the 17th of February.
The ATT also retains a commercial credit facility that comes to £75 million and the trustees have stated their own expectation that the UK government “will provide additional financial support to the ATT as necessary”.
So, if you’d like to learn more about how your consumers’ monies are protected with Protected Trust Services (PTS) and how we support excellent travel businesses, check out our pages. Or you can get in touch with the lovely PTS team by calling 0207 190 9988 or emailing us at email@example.com.