Proposal to amend ATOL Standard Term 5

This project aims to provide the CAA with the ability to request an increased amount of booking data to support compliance checks and cross-check this data with licence authorisations. It will enable the CAA to undertake random, ad-hoc checks of data from affected ATOL holders and assist in our regular compliance checks, for example in relation to licence authorisations, APC payment and reporting.

Access to this data will also assist the CAA in the event of a failure where it is required to fulfil various functions, from managing the refund process for those with future bookings through to organising the repatriation of consumers who have already departed from the UK. In order to fulfil these functions, it is important for the CAA to gather accurate and complete booking data, in the appropriate format, from the failed ATOL holder. 

The CAA’s experience has been that the booking data received from failed ATOL holders can be of insufficient quantity or quality to allow it to manage failures effectively and efficiently. In some cases significant time can be spent by the CAA in combining and cleansing different data sets from failed ATOL holders. This is an inefficient use of resources and can lead to a less-than-optimal customer service experience for affected consumers. This is particularly the case for larger ATOL holders.

In amending ATOL Standard Term 5 to provide clarity over the booking data required by the CAA in the event of the failure of a larger ATOL holder, this proposal will ensure that the CAA receives the necessary data in the required format to enable it to manage a failure effectively and efficiently. 

The proposal will also assist the CAA in its contingency planning for future failures. Greater specificity and standardisation of the booking data required by the CAA will enable it to determine, before a failure has occurred, whether the booking data held by a particular ATOL holder is suitable to allow the CAA to manage the failure of that ATOL holder effectively and efficiently. 

The proposal

We propose that ATOL holders who fall in the category of Standard ATOL with an ATOL limit equal to, or in excess of, £20 million, will be required to record, maintain and report on the booking data specified in the proposed CAP document. The draft CAP document is set out in Appendix B and provides a list of these booking data items. 

Although the CAA expect ATOL holders of all sizes to maintain a complete and accurate record of booking data, as already required by ATOL Standard Term 5, the issues highlighted by the CAA above in relation to the quality of booking data are particularly problematic in the case of larger ATOL holder failures. For this reason the CAA are of the view that it is appropriate to focus the proposal and the specific requirements on ATOL holders above a certain size threshold. Our view is that aligning this threshold with that which already applies for the CAA’s more in-depth financial analysis, for which ATOL holders are required to submit additional financial information to the CAA (in accordance with ATOL Policy and Regulations 2016/01), is the most proportionate approach. We are therefore proposing that the amendments to ATOL Standard Term 5 and associated CAP apply to ATOL holders with an ATOL limit of £20 million or above.

The CAA recognises that some ATOL holders may need to make changes to their systems (and or any systems business systems suppliers) and therefore we propose that the amendments come into effect 12 months from the date that the amended ATOL Standard Term 5 is published in ORS3. Affected ATOL holders will therefore have a period of 12 months to comply with the requirements.  

This consultation seeks the views of stakeholders on the proposed changes to ATOL Standard Term 5, as well as the list of additional data requirements in the draft CAP.

Standard ATOL holders with an ATOL limit equal to, or in excess of, £20 million are affected because this proposed requirement within ATOL Standard Term 5 directly impacts this group of stakeholders.

All other ATOL holders, with an ATOL limit below £20 million are affected because although not caught by the proposed requirement, some of these ATOL holders may voluntarily choose to ensure their systems can fulfill this requirement, even if not mandatory. This is likely to be the case if the business is growing and is expected to grow beyond the £20m threshold.
 

Business Systems Providers are affected as provider of the business systems to many ATOL holders. Depending on the functionality of the systems they provide to ATOL holders, they may need to update their systems to ensure that it allows their customers to comply with the new requirement.

Consumers are affected because in the case of an ATOL holder failure, the CAA can be assured that in-scope ATOL holders will be able to supply the relevant data, in the required format to the CAA. This will mean consumers will receive a more efficient service from the CAA in terms of repatriation, or refund.