Letter from , Minister for
Aviation, Maritime and Security, on the ATOL scheme enforcement
powers
Dear and Robert Bishton (Interim
joint CEOs of the Civil Aviation Authority),
In light of the ongoing progress being made towards reform of the
Air Travel Organisers Licencing (ATOL) scheme, I write to
recognise the vital role of the Civil Aviation Authority
(CAA) in regulating
businesses that sell package holidays including a flight to
ensure that consumers are protected. I would like to take the
opportunity to thank you and your team for your continued strong
collaboration with the Department for Transport (DfT) in this area.
A holiday can be one of the most important and costly purchases a
consumer makes each year. One of the objectives of
the ATOL reform
programme currently underway is to increase the likelihood of a
consumer being able to take the holiday they have booked. This
will be achieved, in part, through improved industry resilience,
and many of the potential options for reform are focused on
meeting this aim.
To ensure the CAA is best placed to
adapt to the range of possible reform outcomes, I am writing to
confirm DfT’s
intention to consider the potential introduction of a wider
toolkit of enforcement powers for the CAA in relation to
the ATOL scheme. I
believe these powers would further protect consumers, both within
the current ATOL framework, and
as the scheme is reformed.
Importance of the ATOL scheme
Since 1973, the ATOL scheme has
played an important role in maintaining consumer confidence in
the package travel sector. The Government recognises that the
long-term confidence of consumers, the ability of
the CAA to reduce the risk
of ATOL holders
failing, and the ability of the CAA to effectively manage
the process for providing refunds and repatriations, all rely on
an effectively enforced regulatory regime. Whilst
the CAA’s
licensing framework remains the primary tool for
managing ATOL-holder company
risk, the CAA does also hold powers
to suspend or revoke an ATOL-holder company’s
licence, as well as the option to proceed with criminal
prosecution. On that basis, I would continue to encourage
the CAA to utilise these
powers if it is deemed appropriate.
ATOL reform
opportunities
I know that the CAA is continuing to make
progress in considering ATOL reforms and is
working closely with the team at DfT. I understand that some of
the potential reform options may require changes to be made to
the ATOL regulations.
As new regulatory requirements are introduced and understood, it
will be important to ensure that the CAA has the right toolkit
to enforce them. It is therefore an opportune moment
for DfT to also review the
legal powers available to the CAA in relation to
the ATOL scheme. I can
therefore confirm DfT’s commitment to work
together with the CAA to consider broadening
the enforcement toolkit for the ATOL Scheme,
including the introduction of civil sanction powers.
Civil sanction powers for the ATOL scheme may
provide useful incentives to encourage all businesses to comply
with the new rules and, ultimately, contribute towards deterring
any bad practice. I am also aware of some existing non-compliance
issues that the CAA currently works with
businesses to resolve and recognise that a broadened enforcement
toolkit may add useful flexibility to your approach. For example,
this could include the ability to impose financial penalties and
to seek undertakings from businesses to comply with a
requirement. I want to minimise any disruption or harm to
consumers and businesses and will ensure DfT carefully considers
the impact of any proposed changes.
Next steps
If you agree, I suggest that this letter should be published.
This will allow us to demonstrate transparently
that DfT has confirmed to
the CAA that it is fully
committed to considering changes to its enforcement powers for
the ATOL scheme.
Please let me know if you would like to discuss any aspect of
this letter further. I look forward to continuing to progress
this important area of work with you and your team at
the CAA.
[Signed]
Rocio Concha, Which?
Director of Policy and Advocacy, said:
“Which? has led the campaign for much needed reforms in the
travel sector, so it is encouraging that the Department for
Transport is considering additional enforcement powers for the
Civil Aviation Authority (CAA) to take action against breaches of
ATOL rules, which provide vital protection for consumers,
especially when holiday firms go out of business. Whilst this
announcement is welcome, the CAA should be using its existing
powers much more often, including to suspend or revoke ATOL
licences of non-compliant firms where necessary.
"The Prime Minister must also urgently set out legislation to
give the CAA wider improved powers to protect all air passengers.
These must include the ability directly to issue fines against
airlines, who routinely ignore the rights of air passengers to
compensation and rerouting."
