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Government Delays ATOL Reforms

Travel operators have been given more time to prepare for a new system aimed at increasing customer protection when booking cheap holidays.

Transport Secretary Theresa Villiers delighted the UK travel sector this week when she announced that the government has delayed the implementation of its reforms to Air Travel Organisers’ Licensing (ATOL) regulations. The reforms were originally to be implemented in January next year, but will instead not come into force until April.

Ms Villiers said that the reason for the delay was the government’s recognition that travel operators would not have sufficient time to make the necessary changes to allow them to comply with the reforms otherwise.

“This is partly due to the time needed to update IT systems and put in place the processes required to enable businesses to identify when a Flight Plus holiday has been formed,” she said.

“I expect to make a further announcement before the end of the year about decisions on the other ATOL reform issues in the consultation.”

The Flight Plus scheme introduces a new licence covering separate sales of flights, accommodation and other holiday components by a single retailer and is aimed at giving customers more financial protection when booking their cheap holidays in the event of a travel company going bust. All travel retailers, whether they operate online, on the high street or over the phone would require the new ATOL licence and would need to add the £2.50 Atol Protection Contribution to booking charges or pay it themselves.

Ministers consulted the travel industry over the timescale for the reforms earlier in the year. Of more than 80 responses received, the overwhelming verdict was that more time was necessary.

Abta chief executive Mark Tanzer welcomed the announcement, saying: “We are pleased that the government has listened to our concerns, and those of the entire industry, on timescales.”

“This shows how important it is for our members, and the industry as a whole, to put our views to the government in a robust way. While we support the current proposals as a first step towards improving the system of financial protection, the inclusion of holidays sold by airlines is an essential second step.”