AITO: “Merge financial protection systems”

AITO has joined others in calling for a combined financial protection system in its response to the Department for Transport (DfT).

In a recent survey of its 125 members which saw 44 respond, the association said it was “equally clear” that systems should be merged into one to help cut administrative costs for travel companies and provide more clarity into what holidays are protected.

“AITO members were equally clear about the inclusion of airlines in a new one-system-only licensing scheme. When airlines run into difficulties the tax-payer ends up footing the bill for repatriation and AITO members believe that airlines should contribute to this cost, as do tour operators,” said Alisdair Luxmoore from Fleewinter, who is AITO’s industry affairs director. “This is a wonderful opportunity to change a system that was designed for the 1970s into one which will help small UK travel enterprises compete against growing multi-nationals; we hope that the DfT will seize upon it.”

The association calculated that the current cost for small and medium sized businesses to use both systems is GBP6, 300 a year, while those who use one pay around half. This was calculated by the number of hours spent going through the work and external costs from accountants although the association said it thinks members have under-estimated the work involved and would be more.

Earlier this month ABTA and the Association of ATOL Companies (AAC) called for a single financial regulator, both citing that members are keen to reduce administrative costs. The DfT is investigating how holiday money can be protected in the future after the Air Travel Trust (ATT) moved into surplus last year.

ABTA’s response to the DfT’s call for evidence can be found here 

Details of the AAC’s call for a single financial regulator can be found here.