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ATOL Reform: a step in the right direction for consumers, but at what cost?

30 April 2012

Today, the latest reform to the Air Travel Organisers’ Licensing (ATOL) financial protection scheme will come into force.  Announced by the Department for Transport and Civil Aviation Authority (CAA) in February, the reform will bring ‘Flight Plus’ bookings under the scope of the ATOL financial protection scheme.

Commenting on the impact of the latest reform on the UK’s travel business, Graham Pickett, head of travel, hospitality and leisure at Deloitte, says:

“Flight Plus is very much part of the journey towards a level playing field; the vision being however one books, they will be protected.  However, the reform does not come without its challenges – even with Flight Plus, bookings made directly with the airlines will still not be covered.  A change of law will be needed to allow this to happen, though it is in the pipeline.

“Another significant legal hurdle for operators is their need to retain certain data on customers to properly monitor Flight Plus and link bookings; for example, linking a hotel booking made one day to car hire made the next.  Good knowledge of the data protection act will be essential so operators do not find themselves on the wrong side of the law.  Finding the appropriate systems solutions and resource to help staff monitor the Flight Plus element is proving challenging to operators and will create an additional cost burden which will undoubtedly be passed onto the consumer. We have already seen ABTA in recent days comment about the holiday operators’ level of preparedness here and the worry that some will not be ready in time.  

“There are still questions over how the regulator will successfully monitor this new system and combat fraud, such as the issuing of fake certificates.  There will inevitably be a period, as with the previous ATOL revision made two years ago, where the CAA will be working blind until the new audit process catches up with the new registrations.  However, the number of new entrants under the Flight Plus programme is not expected to be significant and many of them are likely to be very small operators.

“The travel industry will definitely need to be more selective about the airlines it contracts with, especially if they are registered outside the EU.  However, in the longer term it is hoped it will create more peace of mind for the consumer and stop operators signing up less trustworthy airlines.

“Despite the evident challenges over the short-term, the latest reform is certainly a step in the right direction for the consumer.  Ultimately, they will be provided with an ATOL certificate for each part of their booking covered by the scheme making it clear exactly where they are protected.  The true prize will only arrive when there is a level playing field and many operators remain hungry for the day that the legislation can be changed to accommodate this.”

Ends

Notes to Editors
About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

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Celine Gordine-Wright
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Deloitte LLP
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Email
cgordinewright@deloitte.co.uk

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