ATOL scheme to be overhauled

The Government is planning to beef up protection for holidaymakers by reforming the Air Travel Organisers' Licensing (ATOL) scheme.

Currently, the arrangement compensates travellers who have purchased a package holiday if the company they booked with goes out of business. ATOL also repatriates passengers if a company goes bust while they are on holiday.

The failure of several big tour operators such as the XL Group, the Globespan Group, Goldtrail and Kiss Flights over the past couple of years has put pressure on the Air Travel Trust Fund, the primary source of funding when an ATOL holder fails. According to the CAA website, it is in deficit to the tune of £32 million.

In a statement to the House of Commons, Theresa Villiers, the Transport Minister, said it was difficult to know which holidays were protected and which were unprotected.

The reforms, which may come into effect at the start of 2012, will "make it easier" to understand which holidays are covered and "will restore protection to what looks like a package holiday".

The plans will cover "flights plus" holidays, where flights and accommodation are booked together or during a short space of time. These are not currently defined as package holidays. Travel agents will also be required to tell customers if a getaway is not covered by Atol. In addition, the paperwork will be simplified and standardised.

However, the proposals have been criticised by many industry players for failing to include flight-only bookings on an airline's website.

Read Cheapflights Media's response to the planned ATOL reforms.

(Image: Andrei Dimofte)

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