OTAs complied with Atol ‘to avoid agent-for-consumer spat’

Leading OTAs have complied with the new Flight-Plus Atol regulations to avoid a confrontation with the industry regulator, the Civil Aviation Authority (CAA), next year.

That is the view of leading industry accountant Chris Photi of White Hart Associates.

Photi told an Abta travel law seminar in London on Tuesday: “The Flight-Plus regulations were targeted at the OTAs, at about 15-20 companies.

“The OTAs have supported it because they are aware that in 2013 agent-for-the-consumer sales will be brought into the Atol regulations.”

Photi said: “Why pick a fight with the regulator now when a year down the line you will have to deal with the CAA anyway?”

The Department for Transport has indicated it intends to bring agent-for-the-consumer sales into the Atol scheme. The Civil Aviation Bill currently going through Parliament would give ministers the means to do this.

However, Photi questioned the need to bring OTAs into the Atol regulations. He said: “We did a study of an OTA client with £100 million turnover and found 97% of that was taken by credit or debit card. More than 90% was with no-frills or scheduled airlines and, of that, 90% with just two airlines.”

He argued that meant OTA customers were financially protected without a need for an Atol.

Referring to the fact that airlines remain outside the scheme, Photi added: “Is there a problem with customer repatriation with those carriers [if they fail]? The government does not seem to think so.”

He criticised the “piecemeal implementation” of reform and described the ‘grace period’ for businesses to comply as “unfair”. The regulations came into force on April 1, but the CAA has allowed a month’s ‘transition period’.

Photi said: “Those who come in [to Atol] late are being given an APC [Atol Protection Contribution] holiday for a month. What about those companies that have been paying the £2.50 APC since April 1?”

He described the lack of strict enforcement as unfair on companies that complied with the original deadline. Photi said: “The CAA is taking a soft-hand approach. That is unfair on those who got their ducks in a row, but you have to support it.”

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