Mark Tanzer: Atol protection to cover ‘Flight Plus’ holidays

IN THE last couple of weeks we have seen the failures of two European airlines – Spanair and Malev, the Hungarian operator – leaving passengers stranded or their travel plans in tatters.

The incidents once again highlighted the gaps that exist in holiday financial protection, with many people booking flights and travel plans assuming they are protected and only realising they are not when it is too late.

This week, however, brought some good news for holidaymakers as the government announced it is extending the Atol scheme of financial protection so that more flight-based holidays booked with travel agents and tour operators are protected. The changes will bring an estimated six million additional people under the Atol scheme for holidays booked from 30 April this year.

Atol is a government scheme that provides holidaymakers with a refund should their holiday company go bust and covers the cost of getting home should that happen whilst they are abroad.

Currently the scheme covers those booked on package holidays, which is equivalent to approximately 18 million holidaymakers.

Under the changes announced this week, the government has extended the scheme to include what are called “Flight Plus” holidays. Many people now book what looks like a package holiday but is sold in a way which currently falls outside of Atol. This has left people uncovered and confused as to when they are and aren’t protected. This is why from 30 April, the government is extending financial protection to cover ‘Flight Plus’ foreign holidays.

A “Flight Plus” holiday is when a customer buys a flight and accommodation and/or car hire, together (either on the same day as the flight, the day before or the day after) from the same travel company or from linked companies.

Additionally, to make it easier for consumers to know when they are protected, the government has announced that by 1 October, all Atol customers will receive an Atol certificate when they book their holiday. This will either be a paper copy or e-mailed to them as proof of their protection.

While these reforms are undoubtedly good news for holidaymakers, a lot of people will still be left outside of Atol protection. This is because the changes do not extend to cover customers who book a holiday or a flight directly with an airline.

The government did state its intention to bring holidays sold by airlines into the Atol scheme, but to do this they need to pass new legislation, meaning that the earliest this can happen is 2014.

Abta believes that all holidays should be protected. Over the past years there have been some high-profile financial failures that have left customers stranded abroad and without a refund for their holiday. Having to cover the costs of getting home yourself can be hugely expensive because availability is likely to be limited, particularly if you are trying to return home from a popular destination during peak summer holiday time.

Very few travel insurance policies cover company failures. They cover belongings, delays/cancellations and medical assistance but don’t usually refund you or get you home if your holiday company fails.

Credit cards can offer you limited protection if your holiday company goes bust, but will only refund the part of the holiday that has failed, not the whole cost.

So while this week’s announcement is a step in the right direction for giving holidaymakers the protection they deserve, until the government brings holidays sold by airlines into Atol there will still be millions of people booking holidays that aren’t adequately protected.

In the meantime, the best way to guarantee protection for a foreign flight holiday is to book a package holiday or “Flight Plus” (after 30 April) with a travel agent or tour operator. Abta provides protection for non-flight based package holidays, such as cruises or train holidays. You should also make sure you book with a reputable company. Abta membership means that the travel agent or tour operator you are booking with has met certain financial criteria, follows a strict code of conduct and can provide extra assistance for you if something goes wrong.

• Mark Tanzer is chief executive of the Association of British Travel Agents (Abta)