Air Travel Organisers' Licensing
Air Travel Organisers' Licensing (ATOL) is a United Kingdom Civil Aviation Authority (CAA) scheme to protect people who have purchased package holidays (Thomson, Thomas Cook, Jet2holidays, etc.) and flights from a member tour operator.
The majority of UK tour operators are required to hold an ATOL licence, without which they may not legally sell air travel. ATOL licensed firms will have had their business practices inspected by the CAA. An ATOL licensed tour operator must also obtain insurance bonds from the CAA. The aim of this is to provide refunds to travellers affected by any event which causes the airline to be unable to provide travel for its customers, and to arrange for flights (in addition to accommodation and other items which may be included in a package holiday) to return home those who are still abroad at this time.
In the 1960s, voluntary organisations such as the Association of British Travel Agents (ABTA) provided a degree of financial protection for air travellers. In 1970, the Federation of Tour Operators (FTO) (then the Tour Operators Study Group) introduced a bonding scheme whereby their members had to obtain bonds to the value of 5% of their annual turnover. In 1972, the ABTA followed suit.
The Civil Aviation Act 1971 established the CAA. Covered under this act was the creation of the original ATOL Regulations. These mandated that all travel organisers, those tour operators whose primary mode of transport was air (but not airlines themselves), must hold a licence. These regulations came into effect in 1973.
In August 1974, the Court Line group collapsed. It was the second largest tour operator at the time and its subsidiaries included Clarkson Holidays. Clarksons Holidays held an ATOL licence and were therefore theoretically covered by their insurance bond. Unfortunately, although the 35,000 passengers stranded abroad were repatriated, there was insufficient funds for the 100,000 whose holidays had been paid in advance. This led to considerable media attention. A government fund called the Air Travel Trust has since been introduced to pay for any excess which is not covered by ATOL.
- Civil Aviation Authority History of ATOL