This is the final impact assessment for reforms to the Air Travel Organisers’ Licensing (ATOL) scheme.
What is the problem under consideration? Why is government intervention necessary?
The ATOL scheme protects consumers when their package holiday tour operator becomes insolvent. It needs updating to reflect how holidays are now sold. Developments in the travel industry have made it increasingly difficult for consumers to know whether or not their holiday is a ‘package’ as legally defined and so protected under the ATOL scheme. Intervention is needed to restore clarity for consumers and the travel trade. Also, for historic reasons the scheme’s finances are in deficit of £42 million. Intervention is needed to put the scheme back on a sustainable basis, allowing the government guarantee underpinning ATOL to be withdrawn and so that holidaymakers and travel firms fund the scheme rather than taxpayers.