ABTA Accused Of ‘Lack of Transparency’ Over Bonding Requirements

ABTA has been accused of “a lack of transparency” on bonding requirements as many members complete both ATOL and ABTA-bond renewals this month.

The association denied the charge by White Hart Associates head of travel and leisure Chris Photi, claiming most members had renewed bonds “without difficulty”. But it conceded it had toughened bond requirements for some businesses to cover the value of refund credit notes carried into next year.

Photi urged ABTA “to be more transparent”, saying: “ABTA has a published rule book which shows how bonding is calculated, but it’s applying a different regime. It wants to increase bonds even though no insurer will increase capacity. That isn’t sustainable.”

Photi also said: “One client whose ABTA bond was £500,000 last year has been asked for a £1.5 million bond. Where are they going to get it? There is no desire on the part of the CAA or ABTA to precipitate failure, but an intransigent approach will do that.

“I understand why ABTA wants to do it, but I want a set of rules that clients and professionals like me can rely on and plan towards.”

However, ABTA director of membership and financial services John de Vial insisted: “We’re seeing the majority of members renew bonds without difficulty [and] members get increased bonds. There hasn’t been a meltdown in the market.”

He conceded: “We’re applying some different analysis in the current crisis, as is the CAA. None of us has previously seen this aggregation of value being carried forward as refund credit notes across everyone’s entire programme. It’s not covered by normal calculations, so some things are being done differently.”

De Vial said: “Our job is to ensure members are compliant with the Package Travel Regulations [PTRs].

“Those require that we hold sufficient security to ensure consumers can be refunded in full. Part of calculating sufficient security in the current situation is calculating the value of outstanding refunds and, in some cases, that is leading to additional bonds being required.

“The system is built on each participant being risk-assessed and covering the risks they represent.

“In some cases, members are being asked to provide additional security because there is an additional risk.”