The UK Civil Aviation Authority has launched a session on ATOL.
The federal government physique stated the challenge will take into account 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 shoppers have had their holidays.
It is a long-standing follow within the business, however in some instances it might fail to incentivise sufficiently strong financing preparations.
The proposed adjustments will take a look at new approaches that would cut back the danger posed to customers 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 have been entitled.
Paul Smith, director on the UK Civil Aviation Authority, stated: “The ATOL scheme exists to guard customers, and it’s subsequently proper that we work to repeatedly strengthen its monetary resilience.
“Following a number of massive ATOL failures lately, now we have turn into involved concerning the impression of companies utilizing customers’ cash as a supply of funding working capital.
“That’s why we’re looking for individuals’s views on altering these preparations to additional improve ATOL safety of shoppers’ cash.”
The session will shut on July thirtieth and the UK Civil Aviation Authority will then take into account suggestions forward of launching a second session making particular proposals in early 2022.
“The journey business will be reassured that we perceive the impression that the Covid-19 pandemic has had on their funds.
“We are going to take full account of the necessity to enable business to regulate to any new preparations that will probably be applied following the general session course of,” concluded Smith.