Trust Accounts are the ‘new black’ for the travel industry, there’s no denying it. There’s increasing talk of the government withdrawing their backing of the Air Travel Trust and if that becomes the case, trust accounts have to be the fall-back position.
But it’s not surprising really, because trust accounts have so much going for them as compared to the usual ATOL bond or ABTA bond:-
- It’s no secret that the cost of an ATOL bond or an ABTA bond is on the up and with the CAA’s minimum bond requirement at £40,000.00, this option is prohibitive for a start-up or low turnover business;
- A trust account makes meeting the CAA’s balance sheet requirements for a successful ATOL application easy to achieve and avoids the need for hefty capital input;
- The CAA favour a trust account solution as it reduces the risk of over-trading on a travel bond or other guarantee;
- Merchant facilities come more easily and cheaply with the security that a trust account brings;
- Once a trust account is set up, its running costs are low and systems streamlined
- Many banks and insurers that had previously provided travel bonds pulled out of the travel bonding market following the Covid pandemic. Since then, bonding has become expensive and scarce.
All these facts are an attractive pull for start-up companies and established businesses alike. We are relishing the change!
