From June 1, travel firms will be subject to a series of new assessments designed to limit the number of failures in the industry.
The new proposals announced last week were welcomed by some industry experts, but others warned they could lead to widespread confusion.
In advance of the deadline, companies can access a new online self-assessment tool in order to see if they have passed the tests (four for SBA holders and seven for those with standard Atols).
Speaking at an industry seminar hosted by Barclays and MacIntyre Hudson, Christina Brazier, a senior Atol manager at the CAA, insisted regulators would work with businesses potentially affected by the change.
“We are hopeful… that there’s not going to be significant levels of people failing the test,” she told delegates this week.
“However, having said that, there will be some SBA holders who will struggle. We will be sensitive to their needs. It is not our intention to bring this Atol test in and then to suddenly have a mass of failures.”
Nevertheless, Brazier said there was a reason why the changes were needed. When the original consultation was released in 2014, the CAA initially proposed the total scrapping of the SBA system, in part because of the financial burden placed on the Air Travel Trust.
Brazier added: “We will be sensitive to people initially so that we can reach a conclusion that’s appropriate in the circumstances. But what we need to understand is that previous Small Business Atol [holders] have been trading insolvently and yet they’re taking consumers’ money way in advance. It’s not a situation that consumers should be put in.”
In recent years the CAA has looked at ways to effectively outsource the risk associated with financial failures. This led to the growth of Accredited Bodies with ringfenced trust accounts, as well as franchises.
Earlier this year, a new insurance-backed Atol product was given the green light by the CAA.
Brazier said that she expected even more protection options to become available over the coming months.
“We are speaking to a number of organisations so we do expect that number to grow over the next year as well,” she said.
