Passenger holiday protection levy may rise sharply

The current £1 levy imposed on travel companies to protect the holidays sold to their passengers could rise to £5 next year, in spite of opposition by many of the industry’s leaders in Britain.

The £1 ATOL Protection Contribution (APC) that is now paid by travel operators on every one of their bookings is used to underwrite financial protection for consumers on their package holidays. The amount is expected to increase in the wake of the high cost of rescuing stranded passengers and issuing refunds after last year’s collapse of XL Leisure, the third-largest of Britain’s travel companies.

Last September, more than 250,000 passengers were affected when XL failed. Around 85,000 of these customers required repatriation. Although the company had a bond of £42 million, administrators report that the overall costs resulting from its collapse approached £80 million.

The UK Civil Aviation Authority (CAA) is denying reports that indicate there are insufficient funds in the Air Travel Trust Fund to cover another travel operator failure. A spokesman for the CAA has also refuted recent media reports that Barclays Bank had refused to grant its request for a £60 million overdraft extension.

www.atol.org.uk