The Civil Aviation Authority (CAA) has announced that the cost to them of three major travel companies failing over this summer will be in the region of £45 million.
Goldtrail was the first of the three to go in July, and as it had no bond with the CAA it is thought the cost of refunding its 112,000 passengers is expected to be around £20million.
Next came Sun4U who went under in early August, they had a £400,000 bond but the cost is expected to reach the £1 million mark with 4,200 expecting refunds.
Kiss Flights followed in mid August, they had a £1 million bond although payouts for its 64,000 passengers are expected to also reach £20 million.
The CAA have confirmed that the Air Travel Trust Fund have the finances available to meet the claims, despite being in the red by £31.8 million in March 2010. Increased income from the ATOL Protection Contribution payments had luckily reduced the deficit before these recent claims were made.
This payment is the contribution that ATOL (Air Travel Organisers’ Licensing) must make to the Air Travel Trust Fund for every package or flight booking that its members make. The money in the fund is there to safeguard customers of a failed ATOL holder. It is part of the overall cost you pay for your holiday and ATOL members usually state how much this contribution is in their brochures, on their websites or on their confirmation invoices.
This will also enable the fund to meet the £45 million costs without breaking its overdraft or credit agreements. The fund had hoped to be out of the red by spring 2012, however it is estimated that this will now take a little longer.