By Roger Bray
Business travellers will benefit from a new insurance scheme designed partly to ensure consumers do not lose money when scheduled airlines go bust.
The Association of British Travel Agents (ABTA) plans to oblige its members to offer the policy to customers. The price has yet to be determined but ABTA's chief executive Ian Reynolds said: “It is likely to be on the right side of Â£2.”
The aim of the scheme, which was unveiled at the Association's annual convention in Orlando, Florida, is to ensure that travellers are left not out of pocket by the collapse of carriers or hotel operators which are not covered by existing financial protection regulations.
But it will also protect the increasing number of individual business travellers and small firms using low cost airlines, some of which may prove vulnerable to increasingly intense competition.
Fares paid by scheduled passengers are protected under the UK Consumer Credit Act where the booking is worth Â£100 or more. But many low cost airlines bookings are below that level.
The relevant clause in the Act is also under threat from the EC because the UK is alone among EU states in offering such protection and Brussels is keen to level the playing field.
Currently some TMCs offer such insurance while others do not. The UK's Advantage consortium recently introduced a policy for its members.
ABTA's proposed scheme would include its package tour operator members and about 1,700 companies with 6,800 branches, up to 90% of the UK's retail agents.