PASSENGERS on scheduled airlines may well in the future have financial protection with tickets booked in advance if a draft proposal published by the UK CAA last Saturday is taken up. Other than that offered under the present credit card control system bookings made, typically with budget airlines, would be lost if that airline failed financially. The CAA says it intends to recommend that the existing protection through ATOL (Air Travel Organisers” Licensing) should be widened to include bookings made direct with airlines. This follows a consultation in 2003 when the CAA noted that the effective coverage through the ATOL was declining because of a trend for people to book separate holiday components, often including flights on no-frills airlines, rather than packages. These bookings carry either limited protection against insolvency or none at all, but CAA research showed that the public was not aware of that. They sought views on what the scope of financial protection should be and how it should be provided. The draft advice, which is now being circulated to key parties and to those who responded to the first consultation, suggests that advance payments for bookings direct with airlines should be financially protected. How this is to be funded remains very unclear, the ATOL operation bonded by the operators. The airlines are not keen in finding the cash needed for something similar, some sort of insurance operation the most likely way ahead, added as premium to tickets.
http://www.caa.co.uk/docs/436/Consultation_Paper.pdf