p4 nov21 19/11/08 22:52 Page 4
news
21.11.2008
XL’s collapse and a possible
hike in APC have increased
CAA and trade
pressure on travel industry
C
O
leaders to agree a solution STO
VER
to consumer protection
target airlines
R
Y
ahead of talks with Hoon
Lee Hayhurst.
Noel Josephides, Aito director and Abta board
Your views
THE BODY that runs the Atol system was heading member, said it was always understood that APC
for a showdown with the industry this week might have to go up, and it was “bad luck” a big
Bosses due to attend yesterday’s meeting told
over an expected increase in the £1 levy that failure came so soon after it was brought in.
TTG what they hoped it would achieve
underpins the consumer protection scheme. He said he hoped the XL failure might help
Paul Hemingway, finance A meeting due yesterday in London between change government opposition to airlines coming
director, The Co-operative the CAA and 29 handpicked travel industry under Atol, but thought it might take more
Travel: “We are looking bosses was being seen as the start of a renewed airline failures to “ram the message home”.
to move towards a system attempt to force the government to bring all “The fault lies with government and the fact
with three clear elements: airlines into the Atol system. that it has allowed legislation to lag behind the
certainty, so that people This would mean the CAA would not have to way the industry works,” said Josephides.
know what they are buying; increase APC to what one industry expert esti- Alan Bowen, of AGB Associates and legal adviser
simplicity, so that it is easily mated could be as much as £5 (see pages 12-13), to the Association of Atol Companies, said: “The
understood; and confidence although TTG understands the CAA has indicated airlines’ lobbying is very effective, so the chances
for holidaymakers when they are making their it will rise to between £2 and £3 next year. of getting them into Atol is very remote.”
arrangements. It is essential to establish a level However, Andy Cooper, director-general of
playing field, with processes effectively enforced.” the FTO, said he was opposed to any increase,
APC key questions
despite XL Leisure Group’s recent failure plung-
John Hays, managing ing the fund that backs Atol further into debt. Does CAA have the power to raise the £1 APC?
director, Hays Travel: “I “Our view remains: why should it be increased Yes, but it has to enter into a statutory
don’t care whether it is an when the CAA assured the trade that even with a six-week consultation period
Abta or CAA scheme or big failure it would not have to increase,” he said.
supplier failure insurance: Cooper added that the CAA had not shown him Can firms pass on any rise to the public?
customers want to be the report from accountants Ernst & Young on Firms must absorb the first 2% of costs and the
protected, that must be the which the APC financial model was based. It had amount they can pass on is capped at 10%
minimum objective. I want apparently predicted no big failure before 2012.
some clarity and a level
playing field. We are in a bizarre situation where
we are members of Abta, we have an Atol and yet
we are not getting clear, definitive answers.”
Aito sets up own talks with Hoon
Steve Endacott, chief AITO has followed Thomas Cook and Tui Travel in Chris Photi, senior partner at White Hart
executive, On Holiday setting up a meeting to discuss financial protec- Associates, who was due to be at yesterday’s
Group: “I have got an open tion with new transport secretary Geoff Hoon. meeting with the CAA, said it was important the
mind but what I would like As TTG revealed last week, Thomas Cook and industry sent its top people to meet ministers.
to see are tangible steps Tui will meet Hoon on December 4. “If we as an industry do not take this seriously
taken and a road map going It had been assumed the big two’s bosses, Peter then why should the government?” he asked.
forward. I would also like to Long and Manny Fontenla-Novoa, would attend. Advantage chief executive John McEwan
get a clearer understanding But Long was confirmed as attending only this added: “In an ideal world we would want the
of who is going to get paid week instead of Tui planning director Neil Morris. CEOs of our top two companies representing us.”
from the XL failure so that those companies who Fontenla-Novoa is due at a Cook event and a The Aito meeting will be held early next month.
are not going to get their claims paid can take spokeswoman said on Wednesday a decision had Director Noel Josephides said Hoon was more
action to make sure it won’t happen again.” still to be made on who would attend. likely to listen to trade bodies than the big two.
04 21.11.2008
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