The anticipated Atol reform proposals are now expected to be discussed in 2025, according to Michael Budge, head of Atol at the Civil Aviation Authority (CAA).
- Progress on Atol reform has stalled, with no significant movement expected before the end of this year.
- The initial consultation on Atol reform began in April 2021, aiming for completion within two to three years.
- Challenges faced by businesses post-Thomas Cook and amidst Covid-19 setbacks have altered the consultation landscape.
- The government’s direction will significantly impact the final recommendations and implementation of the Atol reform.
Michael Budge, the head of Atol at the Civil Aviation Authority (CAA), has expressed hope that a consultation on the final proposals for Atol reform will receive approval from the Department for Transport by 2025. Speaking at the recent Future of Travel Conference held in London, Budge conveyed that while progress on the reform is unlikely before the end of this year, there is optimism for consultation on final proposals next year.
Initially, the CAA commenced the reform consultation for Atol in April 2021 with the ambition to conclude the process within two to three years. However, this timeline has been extended, primarily due to the intricate work involved following a Request for Further Information issued by the CAA in January 2023. This request was in response to the extensive feedback received from industry stakeholders.
Simon Bunce, head of legal affairs at Abta, has raised questions regarding the necessity of reforming the Atol scheme. According to Bunce, a notable number of travel companies have already adopted proactive measures by segregating customer funds from their business accounts since the first consultation was released. This shift in practices may reduce the necessity for further regulatory changes, as Bunce suggested that the CAA need not implement formal and structural adjustments in light of the industry’s current trajectory.
Budge acknowledged that the decision on the future direction of the Atol reform ultimately rests with the government. He highlighted the importance of clarity and certainty for businesses to facilitate strategic planning concerning any new Atol requirements and financial arrangements. Budge also noted the changing business environment since the original consultation, which followed the collapse of Thomas Cook and was marked by the logistical challenges posed by Covid-19.
Reflecting on current market conditions, Budge emphasised the need to gauge the right regulatory approach suitable for the existing market dynamics. Despite different challenges confronting certain businesses, others have stabilised. The regulatory response will need to account for these variations, ensuring an equitable framework across the board.
The path to Atol reform remains complex, with the government’s direction pivotal to the outcome.
