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Brexit: ATOL protection scheme

Published Tuesday, November 5, 2019

This Commons briefing paper provides a summary of the impact on ATOL of a “no deal” Brexit. In the process, it also provides an outline of the current insolvency protections provided by ATOL in respect of package holidays and LTAs.

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The Package Travel and Linked Travel Arrangements Regulations 2018 (S.I. 2018/634) implements in the UK the EU Package Travel Directive (2015/2302). The Regulations protect consumers buying package holidays or linked travel arrangements (LTAs) and impose obligations on the organisers of package holidays and traders which facilitate LTAs: the degree of protection is greater in the case of packages. Those protections include:

  • the provision of clear information to travellers; and
  • a requirement that organisers put in place adequate insolvency protection to cover, in the event of the organiser’s or trader’s insolvency, the refund of payments made by or on behalf of passengers and, if necessary, their repatriation.

The ATOL (Air Travel Organisers’ Licensing) scheme is a key mechanism by which the exiting Directive is implemented in the UK. This Directive places an obligation on companies selling package holidays to have insolvency protection in place.   In brief, ATOL is a UK financial protection scheme managed by the Civil Aviation Authority (CAA) on behalf of the Secretary of State for Transport, it protects most air package holidays sold by travel businesses that are based in the UK. The scheme also applies to some flight bookings, usually those where you book flights but do not receive your tickets immediately.

The UK Government has been publishing Technical Notices in several areas for UK citizens and businesses in the event of a “no-deal” Brexit. In tandem, it has also begun an overhaul of the UK’s legal and regulatory environment and has published statutory instruments (SIs), to ready UK law for Brexit. Of importance in relation to the ATOL scheme are: 

This Commons briefing paper provides a summary of the impact on ATOL of a “no deal” Brexit. In the process, it also provides an outline of the current insolvency protections provided by ATOL in respect of package holidays and LTAs.

Commons Briefing papers CBP-8559

Author: Lorraine Conway

Topic: Consumers

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