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ATOL Trust Accounts

The CAA is asking whether they should adopt segregation of customer money as a mainstay of the ATOL system: ATOL trust accounts are likely to be here to stay.

If your ATOL is coming up for renewal, you may be asked by the Civil Aviation Authority to set up an ATOL trust account or ATOL escrow account as a condition of them renewing your ATOL.

We can hold your hand through this process, whether that is by being appointed as a trustee or just by offering trust support.

The CAA’s standard stand alone full ATOL trust envisages the following structure:-

  • Separate designated trust bank account to be opened with a CAA approved bank supported by bank undertaking;
  • All consumer payments made for licenced sales to settle directly into the trust account or via an interim bank account (funds should reach the trust account no later than two days following their receipt into the interim account).
  • Payments made via agents should reach the trust account 5 days or less after they are received by agents (irrespective of whether or not the ATOL holder has actually received them);

Trustees are authorised by the trust deed to release payments based on a ‘payment request’ system in the following situations:-

  • Performance – return from travel 
  • Component Performance – a component part that has been fully performed by a non-ATOL supplier on whose behalf the ATOL Holder acts as agent at the date of the Payment Request. 
  • Component Reimbursement – Payment already made to the non-ATOL supplier of any component part (excluding flights) where the ATOL Holder acts as agent for the supplier, SAFI is in place and the CAA have approved the agency status. 
  • Flight Carrier Reimbursement – Payment already made to flight carrier in return for a confirmed ticket with guaranteed travel if SAFI held and approved by CAA. 
  • BSP Payment Performance – Payment already made for airline tickets through IATA BSP if SAFI held and approved by CAA
  • ATOL Holder Flight Plus Reimbursement – Payment already made for a Flight Plus to an ATOL holding principal 
  • ATOL Holder Package Reimbursement – Payment already made for a Package to an ATOL holding principal where SFI is held and approved by CAA 
  • Refund already made – covers refunded sums to consumers 
  • Cancellation prior to request – covers cancellation charges due back to the ATOL Holder 
  • Limitation Expiry – Sums older than 6 years 
  • Closing Date Expiry – Sums following closing date 
  • Scheduled Airline Insurance Refund – Payment already made to consumer or for repatriation/alternative following claim on SAFI policy 
  • Supplier Failure Insurance Refund – Payment already made to consumer or for repatriation/alternative following claim on SFI policy 
  • Insurance Premium Refund –Insurance premiums paid and insurance issued. 
  • APC Payment Reimbursement – APC paid to ATT (requires written request and written CAA confirmation of receipt of the same attached to request). 
  • Corporate Credit Card Flight Purchase Reimbursement – Payment already made to flight carrier in return for a confirmed ticket with guaranteed travel where payment has already been made to flight carrier using a corporate credit card.

This structure can represent a significant barrier to travel businesses that have been used to operating in a fundamentally different way. Having appropriate trust support from people that understand the CAA trust structure and ATOL trust accounts is an invaluable part of a transition that the travel industry may not be able  to avoid.

 

Talk to us about our trust support and consultancy services.