Background and Summary Reform to the legislative framework of the CAA Regulation of the provision of flight accommodation
25.The Act amends the Secretary of State’s existing powers to regulate the provision of flight accommodation, which is the basis of the Air Travel Organiser’ Licensing (ATOL) scheme run by the CAA. The scheme protects passengers purchasing seats on flights, mainly where these form part of a package holiday or a ‘Flight-Plus’ holiday, in the event of the insolvency of a package tour operator or travel agent. The DfT consulted on the proposals to reform the ATOL scheme in summer 2011(9), including broadening the scope of the Secretary of State’s regulation-making powers to allow the scheme to better reflect the way in which holidays including a flight are now sold and arranged. Following from this, section 71 of the CAA 1982, as amended by section 94 of the Act, allows the Secretary of State to make regulations to require ATOL licences to be held by (i) airlines for the sale of holidays including a flight (ii) businesses procuring holidays including a flight on an “agent for the consumer” basis and (iii) businesses that facilitate making available flight accommodation. It also provides the Secretary of State with powers to make regulations imposing obligations on ATOL licence holders and giving consumers a right of action in the courts in relation to contraventions of those obligations.