The UK Civil Aviation Authority has launched a session on ATOL.
The federal government physique stated the challenge will contemplate evolving the regulatory framework to enhance monetary resilience.
At current, some ATOL protected journey companies use their clients’ advance funds for his or her holidays to fund their very own operations, earlier than the purchasers have had their holidays.
It is a long-standing observe within the trade, however in some circumstances it might fail to incentivise sufficiently strong financing preparations.
The proposed adjustments will have a look at new approaches that would scale back the danger posed to shoppers ought to any particular person journey enterprise stop to commerce, the CAA stated.
The Covid-19 pandemic has additionally additional highlighted how difficult it was for some companies to pay clients the refunds to which they had been entitled.
Paul Smith, director on the UK Civil Aviation Authority, stated: “The ATOL scheme exists to guard shoppers, and it’s due to this fact proper that we work to repeatedly strengthen its monetary resilience.
“Following a number of giant ATOL failures in recent times, now we have grow to be involved concerning the impression of companies utilizing shoppers’ cash as a supply of funding working capital.
“That’s why we’re looking for folks’s views on altering these preparations to additional improve ATOL safety of shoppers’ cash.”
The session will shut on July 30th and the UK Civil Aviation Authority will then contemplate suggestions forward of launching a second session making particular proposals in early 2022.
“The journey trade may be reassured that we perceive the impression that the Covid-19 pandemic has had on their funds.
“We’ll take full account of the necessity to permit trade to regulate to any new preparations that will likely be carried out following the general session course of,” concluded Smith.