ATOL Flight Plus | Flight Plus from ATOL

Congratulations to the CAA…you pulled it off and have brought the Dynamically Packaging sector to heal and into the ATOL fold as of May 2012.

There have been a few keystrokes of luck along the way. For example if DNATA had not acquired Travel Republic, it is likely that they would have again taken the CAA on head to head and gone down the perfectly legal  “Agent of the Customer” route avoiding the requirement to offer Flight Plus ATOL cover. This in turn would have left the rest of the sector with the difficult choice of giving a competitor a significant pricing advantage or following suit scuppering Flight Plus in the process.

Secondly, Flight Plus is being launched at a time when the weakest airline players like Excel, Globespan, etc. have already bitten the dust leaving the bulk of flight supply in the hands of stable airlines like Ryanair and Easyjet. Hence, the market for SAFI and Supplier Failure Cover have opened up enough to allow Agents to re-insure their increased risk from supplier failures.

Flight Plus ATOL will definitely benefit the CAA and the Government, but I have reservations whether the changes will actually benefit the customer, as I can see even more delays in customers getting their holiday money back in the case of a major airline failure.

Historically when a tour operator collapsed agents made customers pay again for their holiday and then reclaim their money back from the CAA, which often takes up to 9 months. Under Flight Plus, legally the agent cannot charge the customer again and must replace the flight at their own expense and reclaim the cost from their insurers if they have SAFI or Supplier Failure Cover.

However, there is no legal requirement for agents to have such insurance cover and no way for customers to know which agents do or do not have insurance. So what happens when an agent does not have insurance and cannot afford to replace the flight? The customer can no longer directly claim from the CAA as it’s the travel agent’s liability and therefore they would have to take legal action against the agents and only if this forces them into bankruptcy would the CAA pay out.

The simple question is, how long would this take and how is this clearer for the customer?

Given that all major Dynamically Packaging companies have been providing SAFI or Supplier failure cover as financial protection for the holidays they sell, its hard to see how the move to Flight Plus ATOL has improved the protection offered to customers, but it is clear that a the ATOL logo is not the uncomplicated insurance customers may think it is.

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