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Insurance risk for holidaymakers

06 July 2004
Consumers are not properly covered for the potential collapse of their holiday firm, a travel industry report will warn.

The Air Travel Insolvency Protection Advisory Committee (ATIPAC) is expected to accuse the government of showing "inaction and inertia" about protecting holidaymakers from travel company collapses and warn that it is likely to take a major collapse, rather than a deliberate policy, to change the current situation.

The independent committee report, published by the Civil Aviation Authority (CAA), reveals that The Air Travel Trust, which protects consumers if a holiday firm fails, is nearly £10 million in deficit.

A leaked excerpt from the report, published today, was published in Travel Weekly magazine.

"The government has no policy. It appears the system will only change when a major failure takes place - when catastrophe rather than deliberate policy is the driver. Such inaction and inertia is a disgrace," the Travel Weekly article reports ATIPAC as stating.

Last week, Andy Cooper the Federation of Tour Operators director general told the House of Commons Transport Committee that an airline going under within two years was "more likely than not".

The CAA is due to issue its own report on the future of consumer protection later this month.