Atol protection may potentially be the saving grace for 180,000 customers who are believed to be currently on Thomas Cook holidays. The travel firm could fall into administration this weekend unless £200million in extra funds is found to cover contingency funding for the winter months. A collapse of this business, which employs 22,000 staff, 9,000 of which live in the UK, would require a massive repatriation effort which could see a bill of £600m spent on trying to get UK nationals home.
Alana Gomez, spokesperson for flight-comparison site www.jetcost.co.uk, said: “This morning’s news surrounding Thomas Cook is really worrying, not only for the 150,000 or more Britons that could be left stranded abroad, but for the travel industry as a whole.
“If Thomas Cook fails to secure the extra funding required then ATOL and the UK government are going to find themselves with a mammoth effort to repatriate holidaymakers at a cost in the millions from UK taxpayers’ money.
“In addition to this, cruises will be cut short, and those with holidays booked will find that they will be cancelled and without relevant insurances and protection many face not getting their money back – leaving them with no holiday and no money.
“There is small consolation for those that have booked package holidays as they are financially protected by ATOL, and any with future holidays booked will receive a full refund, but will have to now re-book their trip or decide to stay at home.”
What is Atol protection?
Air Travel Organiser’s Licence, Atol protection, is scheme which means your holiday must be protected.
Atol is a UK financial protection scheme which covers most air package holidays sold by travel businesses in the UK.
The scheme also applies to some flight bookings, usually those where you book flights, including UK domestic flights, but do not receive your tickets immediately.
Atol was first introduced in 1973 when the popularity of overseas holidays grew and today it protects around 20 million holidaymakers and travellers each year.
If a travel business with an ATOL ceases trading, the ATOL scheme protects consumers who had booked holidays with the firm, ensuring customers can return home and do not lose their money.
The scheme is designed to reassure consumers that their money is safe, and will provide assistance in the event of a travel business failure.
Atol protection originally covered flights and package holidays only, but the scheme was extended in 2012 to recognise the rising rates of people buying holidays online.
Now, you are covered if you book a “flight plus accommodation” through the same company but from different suppliers.
Travel agents pay £2.50 for each person they book on a holiday into the scheme, which is run by the Civil Aviation Authority.
The money goes into a fund used by the CAA to make sure consumers can either complete their holiday or receive a full refund.
Why Atol is important when booking a holiday?
When you book a holiday, the Atol holder or their agent must provide customers with a certificate confirming you are Atol protected once you have paid any money towards a holiday or flight.
It is advisable to ensure you obtain and keep all the relevant paperwork in case you need to make a claim.
The protection only covers British-based firms, so it is vital to check that the coverage is applicable.
When lowcostholidays went bust in 2016, customers weren’t protected by Atol because the company had moved to Spain in 2013.
But those who had package holidays with Monarch, which collapsed in October 2017, were covered by Atol protection, however, flights only with Monarch were less likely to be covered.
