Holiday Protection – 2012 ATOL Reforms (12.06.12)

All clients travelling under Nomadic Thoughts’ ATOL (Air Travel Organisers License) have enjoyed 100% Financial Protection over the years.

In addition to offering a 100% Financial Guarantee the other long standing ESSENTIAL behind an ATOL protected holiday is that the Civil Aviation Authority (CAA) will honour the services previously booked and will fly you home if your holiday provider fails. For example between 1986-2006 over 200,000 people who found themselves in difficulties  due to the collapse of their holiday provider were repatriated. In additional £ 33 million worth of refunds were returned on advance holiday payments by the CAA.

However, there is still confusion among the travelling public on exactly what other services are and are not covered when purchasing a holiday through a travel agent, tour operator, airline or separate third party. 

The question: when you book a holiday or travel service, is your money and subsequent travel plan safe?

The answer: sadly it is not always straight forward, as it totally depends on how and with whom you book the travel service.

An easy answer is “make sure your holiday is protected by an ATOL” – the difficulty is that traditionally an ATOL only covers you for ‘packaged travel’. Which by definition means a holiday incorporating a flight and additional service(s) listed together on the same invoice.

Do you understand the jumble of Holiday Financial Protection?

To clear up the confusion and simplify the understanding for all, the UK Government have now instigated new rules regarding who is protected if a travel company goes bust. The main issue being that a ‘stand alone’ travel product, such as an air ticket, has historically not been covered by the ATOL scheme.

The 2012 reforms have now narrowed the loophole and most travel companies that sell a flight alongside accommodation, transfers, car hire or any other part of a holiday, MUST be in the ATOL scheme. In addition from 1st October all travellers will be issued with a personalised ATOL CERTIFICATE.

The remaining bone of contention however, is that the reforms have left airlines exempt from the scheme. So anyone booking a holiday, hotel room, hire car or other travel service from an airline website will not be protected by ATOL. 

In the present economic climate this is a serious concern. QANTAS shppk the travel market this week by warning that annual profits could be down 90%. And Tony Tyler, the Director General of IATA (International Air Transport Association) speaking at the Association’s AGM in Beijing, has warned that European airlines are teetering on the brink of financial collapse. Total combined losses are expected to exceed $1billion in 2012 – interestingly $500m more than predicted in March.

  • CONCLUSION: make sure you understand how protected you are when buying on line – and if you want to speak to an expert CALL Nomadic Thoughts.