The UK government is set to carry out a large-scale extension to the Air Travel Organisers’ Liscensing Insurance Scheme, or Atol, which protects millions of holiday makers against the folding of travel firms after bookings are made.

Theresa Villiers, minister of aviation, stated that once the revisions were made, the scope of Atol’s protection would mean that approximately 6 million extra holidays a year would be covered against the sudden collapse of travel companies. It is also expected to impact heavily on the online booking market.

The scheme, introduced in 1970, pays out full refunds to tourists who have booked but not left for their holidays if the provider or agent folds. If already abroad, Atol will provide repatriation to the traveler. In 2009 over 130,000 customers were given a full refund on their holidays and over 43,000 were aided in their return home. However, the scheme only offers limited coverage of flight and hotel bookings which are made online – the revised scheme is intended to give these the same amount of cover as bookings made through a conventional tour operator.

In the wake of the poor economical performance of the travel industry during the recession, the Atol scheme is currently running a deficit of £31.8m (especially given the sheer number of companies which collapsed in the last couple of years). It is hoped that the revisions, which will add £2.50 to each transaction for independently-booking customers, will see the scheme return to a healthier financial standing.

The Civil Aviation Authority and a number of travel analysts have welcomed the move, claiming that it will offer UK travelers extra clarity when it comes to knowing what is fully covered.

Reported by Claire Blackthorne.

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