The simple solution for ATOL reform

ATOL holders to have three choices:

A) Safeguard all Client money in Trust until travel is complete and pay no fee to the Air Travel Trust (ATT) due to De minimis risk. Auditors statements as required to verify.

B) Separate Client payments into Escrow or Trust and only spend Client payments on that Client’s travel arrangements, until travel is complete. A fee to the ATT based on risk, perhaps £2.50 pp. Auditors statements as required to verify.

Special consideration needed for the handful of companies that own an airline. History shows these companies are the highest risk – as when they fail any payments to the airline go with them, see (C). Jet2Holidays operate an airline and manage to keep all Client money separate and unspent as a very successful proof of concept.

C) In a transition period a third option to give time for companies to continue to trade whilst they address under capitalisation. The fee to the ATT to be based on risk, perhaps in year one a minimum of 50% of Client money retained in Escrow until travel is complete and a £10 pp fee, with both figures increasing in each year of the transition until there are just options A and B. Quarterly auditors statements to verify percentage of Client money in Escrow.

Every company must provide audited accounts within 3 months of their year end and their licensing year to fit this. Rather than the daft current regime where all licences are in renewed in either March and September and accounts may or may not be current. Currently smaller companies do not need to provide audited accounts at all (Luxtripper) and this must change.

Put this in place for the September 2024 renewals.