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New ATOL rules offer greater holiday protection

An aeroplane parked at airportHolidaymakers are set to benefit from greater financial protection when putting together their own travel package.

This comes after changes to the Air Travel Organisers’ Licensing (ATOL) scheme.

Since its introduction in 1973, ATOL has only provided refunds and repatriation if a travel operator for a package holiday goes bust.

However, this cover has now been extended under the Flight-Plus scheme.

Launched at the end of April, Flight-Plus covers arrangements that are essentially a package holiday.

What does this mean?

A traditional package holiday includes at least two of the following - flight, accommodation or tourist services, such as a tour representative or day trips.

This type of holiday is booked in advance and is sold at an inclusive price, meaning you pay for everything all together.

But as fewer and fewer people now go on such traditional package holidays, ATOL protection currently covers less than 50 per cent of trips.

But under Flight-Plus, holidays booked online, via call centres and in travel agents which did not have cover will now enjoy a level of protection.

For example, you will now be covered if you buy a flight and either accommodation or car hire separately from the same website, travel agent or tour operator within two days – and use them for the same trip.

It is estimated that between five and 10 million additional holidays a year will now be covered.

Greater clarity for travellers

Flight-Plus should bring greater clarity for travellers right away, while new ATOL certificates are due to be introduced from 1 October.

These will be issued to each customer, clarifying the cover that applies to their booking.

"The move marks a milestone in consumer protection," says Mark Tanzer from ABTA, the regulatory body for travel agents.

"Anyone booking a holiday should be actively looking for Atol protection."

The extended scheme is a big step in the right direction.

What is not covered?

However, travellers need to be aware that it still does not cover flight-only arrangements, holidays booked through airlines, and additional services booked along with flights on airline websites.

Equally, all self-built trips and holidays where you request a flight and hotel from the same company more than two days apart remain unprotected.

"Aspects of ATOL remain unsatisfactory," says Louise Ellman MP from the Transport Select Committee.

"Information can be unclear and protection is patchy for passengers who book flights only.

"The CAA should work with airlines to develop a code of practice for all consumers making overseas holidays or travel bookings."

Additional protection

For all holidays without protection, ensure your travel insurance policy covers end supplier failure, as this should protect against loss due to the collapse of a firm which provides part of the holiday.

Remember that if you pay for your holiday by credit card, you will get protection under Section 75 of the Consumer Credit Act for transactions that cost between £100 and £30,000.

David Black from financial analyst, Defaqto, says: "The credit card provider is jointly liable with the retailer or service provider if the service is faulty or not delivered.

"Section 75 is a useful level of cover if, say, you buy airline tickets and the airline goes bust."

Similarly, if you use a Visa or Mastercard debit card, you can get protection from the Chargeback scheme.

In the longer term, the government has announced it intends to review cover for flight-only sales as part of the forthcoming Civil Aviation Bill, as new legislation is required to extend ATOL protection to airlines.


Esther Shaw

Esther Shaw

Esther Shaw is a regular contributor to and is the former deputy money editor at The Independent and Independent on Sunday. Before that, she worked as a money and City reporter on The Daily Express and Sunday Express.
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