The CAA’s Air Travel Organiser’s Licence (ATOL) scheme protects the public from losing money or being stranded abroad because the travel provider that they have booked to travel with fails.
The CAA have continued to focus on ensuring appropriate protection of advance customer monies and requiring ATOL holders to maintain adequate liquidity to meet future obligations.
The recent ATOL reform consultation issued by the CAA, introduced the option of using escrow accounts for ATOL holders, as a means of providing financial security.
There are similarities between an ATOL escrow account and an ATOL trust account they both share many of the same characteristics as a Trust Account.(https://pttrustees.com/atol-trust/)
An escrow arrangement is designed to protect a set and/or variable percentage of consumer funds collected, and the amount is reconciled on a weekly basis.
However, there are several important differences in the way they operate particularly in the following key areas:
If the Agreed Protected Funds is less than the total amount standing to the credit of the Trustee Account (see Claims from the Trust account), the ATOL Holder will need to submit a Payment Request for the excess of funds along with the Compliance Certificate
Trustees are required to report to the ATT as per below:
Statement setting out:
Given the impact that COVID has had on the travel industry, Escrow Trust Accounts may benefit ATOL Holders that use advance funds to pay airlines before the consumer has enjoyed the holiday.
Escrow accounts maintain the direction of ATOL Trusts in strengthening the UK travel industry by protecting both consumers and travel businesses.
PTT has already onboarded a growing number of Escrow ATOL Holders and is well equipped both in resources and technology to manage these Escrow Accounts in a robust and supportive manner both in protecting consumer funds in accordance with the Deed and providing support to the Travel business.
” In the event of any bank default, we accept no liability but will assist clients to recover compensation from any applicable financial protection scheme.”