CAA ATOL Reform – January 2023 Update

In this article, Senior Partner Matt Gatenby gives a potted history of recent ATOL reform developments following the launch today, 24^th January 2023 of the latest update from the CAA and their renewed request for information…

The Basic Background…

For some years now there has clearly been a strong undercurrent of thinking in the industry that the Civil Aviation Authority’s (“CAA”) Air Travel Organisers Licence (“ATOL”) system needed a review. Opinions, it is fair to say, vary – with schools of thought expressing a view that only slight modifications are needed, with others using phrases like “Root and branch review”. Let’s get one elephant firmly out of the room – many thinkers will highlight that as useful as ATOL review is, the failure by many Governments to deal properly with the Airline Insolvency Review is the missed opportunity here.

Either way, certainly the CAA themselves have recognised that the ATOL scheme itself needed to be reviewed and proposed changes by way of a series of consultations starting in Spring 2021. The take up by the travel industry set a new record for industry related consultations, but by the time an interim summary of the results were published in May 2022 it was clear that there was, shall we say, a luke-warm overall attitude to the initial proposals.

It’s probably fair to assume that the well documented issues at the top of UK Government clearly did not help the CAA in being able to move as quickly as it perhaps might like to have done in picking up the baton once again, but at various stages in late 2022 the CAA made it clear that more feedback from the industry would be sought ahead of a second consultation. Then, in December the CAA’s Head of Operations for Aviation, Michael Budge, confirmed that the next call for evidence would follow shortly – and now that has arrived.

So, What’s In The New Document?

Travlaw’s initial foray into the 48 page document has picked out a few key points of interest including:

The overall implementation is set to be April 2024 so at least we have a target date to look to, although we can’t help but think that no one will be surprised if that runs over!;
There will be a transition period of some kind. The CAA seem to be taking a sensible approach to how the industry will move to the brave new world;
It seems to us that the CAA are at least listening to the previous industry feedback – there is not necessarily a “rowing back” on issues the CAA were clearly keen on previously (such as a real push to segregation of monies) but certainly some thought has gone into the responses from the initial consultation;
Similarly, whilst the industry clearly felt that Trusts were being championed by the CAA previously, the new document talks about Trusts in more of a “they are just one option” type of way.

We know from speaking to so many of our clients that what one business wants out of reform may not be what the next seeks – all the more important, then, that you make your voice heard! Click here to read the document published today.

The link to the survey form for feedback is here