ATOL reforms

With the summer holidays around the corner, Sarah Batterbury continues her series of blogs on changes to the regulatory landscape impacting the travel industry. This week, she looks at the upcoming reforms to ATOL protection.


ATOL stands for Air Travel Organisers Licensing and provides financial protection for consumers booking a package holiday that includes a flight. It was set up in 1973 following the rise in package travel holidays in the late 1960’s/early1970’s and is run by the Civil Aviation Authority (CAA).

Current protections include:

  • Reimbursements if the airline goes insolvent
  • Assistance in travel back home (repatriation)
  • Assistance to stay in accommodation if an airline goes insolvent.

Consumers receive an ATOL certificate prior to travel which confirms the level of protection provided. Some flight only bookings provide ATOL protection but accommodation only is not protected.


Given ATOL celebrated its 50th anniversary last year and has stepped in during all the major events to impact the travel industry during this period – from major airline and travel company collapses, to tourist attacks, wars and a global pandemic – the CAA decided now is the time to table some reforms to the protections.

Consultation to ATOL reform began in 2021 and the CAA tabled to push its reforms live in April this year. However, the task was more complicated than originally thought, with the CAA joining forces to wrap up a series of consultations with the Department for Transport (DFT).

Responses to last year’s RFI from the CAA revealed a sizable divergence of views on possible reforms. Many responses expressed that a “one-size-fits-all” approach would not work given the variety of businesses the scheme now covers and that reforms need to be proportionate to the nature and scale of the risk ATOL holders present. Possible areas for reform include changes to the licence fee, a new “Flight-Plus” licence and providing wider enforcement powers to the CAA for licence breaches:

  • Currently the ATOL fee is set at a flat £2.50 per seat – this could in future be a sliding scale based on the type of holiday, destination and also the cost of the holiday.
  • The Flight Plus scheme introduces a new licence covering separate sales of flights, accommodation and other holiday components by a single retailer and is aimed at giving customers more financial protection when booking their cheap holidays in the event of a travel company going bust.
  • The CAA’s current licensing framework allows them to suspend or revoke travel companies’ licences (with the option for criminal prosecutions for very serious breaches).

Late last year, the Minister for Aviation sent an open letter to the CAA, to confirm that it was interested in working together to put in place a “wider toolkit” of enforcement powers in order to protect consumers and deter bad practice. The letter suggested including civil enforcement powers for the CAA, such as the power to request undertakings or levy fines on non-compliant travel businesses.


The CAA and DFT announced a delay to publishing the reforms earlier this year citing the need for further time to get the reforms right – but gave no indication of timescales. However, with the UK general election just a few weeks away, the beleaguered reforms may now be on the back burner until at least the end of this year.

Further help

This article provides an overview of predicted reforms to ATOL protection. For bespoke advice and support specific to your particular business needs, you can contact me to discuss how we can assist further.

About Sarah Batterbury

Sarah is a senior commercial lawyer working for a wide range of clients from small startups to Fortune Global 500 companies. She started her career at Berwin Leighton Paisner as an IP litigator and then went on to spend 10 years as a consultant at Halebury where she built up a legal practice in the travel tech sector alongside running a business. Sarah advises clients on a wide range of commercial matters from contracts drafting and negotiation to general advisory, regulatory and compliance work.