ABTA's Chief Executive, Mark Tanzer, has recently announced plans to close the gap in consumer protection for travellers who are travelling unprotected against the financial collapse of their travel itinerary suppliers. ABTA have yet to disclose full details of their plans but it is expected to be linked with extending the current ATOL levy changed on package holidays.

The Civil Aviation Authority currently run the ATOL (Air Tour Operators Licence) scheme which places a protection levy on the holiday cost when a traveller either books through a tour operator or where a travel ticket is purchased with another component part of the trip through the same agent. It is estimated that this accounts for under half of bookings from the UK not picking up the huge volumes of flight only bookings or where travellers book directly with the airline. After the first year of operation the fund is running at a £46.5 million loss and the CAA have had to increase the levy from £1 to £2.50.

Michael Ward from ProtectMyHoliday.com commented "the new travel levy operated by the CAA is not even in its 2nd year and already it has increased the cost to passengers by 150% due to the fund running at a loss of £46.5 million. This makes MP'S Expenses a drop in the ocean and worst still they now wish to put proposals forward to cover other elements of the holiday such as airlines when a collapse of just one airline can be some 100 times larger than a tour operator for which they currently charge £2.50 per passenger. Not even £10 per person will cover such a fund especially when over 60 airlines collapsed in the last 12 months with many more expected in the next two years. It should be a legal requirement to inform travellers if they are protected or not and give them the option to protect themselves."

The proposed change in legislation is some time off, if at all possible given the past losses and huge potential exposures, so is there currently protection for the masses of travellers for whom bookings fall outside of the ATOL? The answer is YES, from a number of sources.

Quality travel insurance policies will have protection included as standard under sections such as Scheduled Airline Failure, End Supplier Failure insurance or other Financial Protection.

There are stand alone insurance policies such as ProtectMyHoliday.com which allow customers to get peace of mind at the touch of a button.

Some fortunate travellers will have booked with agents or ticket distributors who will re-book them in the event of an airline collapse even though their arrangements fall outside of the ATOL arrangements, however this is the exception rather than the rule.

The recent collapse of Sky Europe highlighted why the cover is needed as thousands booked direct with the airline and had no recourse when the company went into liquidation.

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