The UK Civil Aviation Authority has launched a session on ATOL.
The federal government physique mentioned the venture will contemplate evolving the regulatory framework to enhance monetary resilience.
At current, some ATOL protected journey companies use their prospects’ advance funds for his or her holidays to fund their very own operations, earlier than the purchasers have had their holidays.
It is a long-standing follow within the business, however in some circumstances it might fail to incentivise sufficiently sturdy financing preparations.
The proposed adjustments will take a look at new approaches that would scale back the chance posed to shoppers ought to any particular person journey enterprise stop to commerce, the CAA mentioned.
The Covid-19 pandemic has additionally additional highlighted how difficult it was for some companies to pay prospects the refunds to which they had been entitled.
Paul Smith, director on the UK Civil Aviation Authority, mentioned: “The ATOL scheme exists to guard shoppers, and it’s due to this fact proper that we work to repeatedly strengthen its monetary resilience.
“Following a number of massive ATOL failures in recent times, we’ve change into involved concerning the impression of companies utilizing shoppers’ cash as a supply of funding working capital.
“That’s why we’re searching for folks’s views on altering these preparations to additional improve ATOL safety of consumers’ cash.”
The session will shut on July 30th and the UK Civil Aviation Authority will then contemplate suggestions forward of launching a second session making particular proposals in early 2022.
“The journey business could be reassured that we perceive the impression that the Covid-19 pandemic has had on their funds.
“We’ll take full account of the necessity to enable business to regulate to any new preparations that can be applied following the general session course of,” concluded Smith.
