New figures published by the Civil Aviation Authority show a small increase in ATOL protected sales, although as a proportion of all air travel, the decline in ATOL protection continues.

The July 2005 edition of ATOL Business, available from the CAA and on the ATOL website shows that 28.3 million passengers bought ATOL protected holidays and flights in the year to March 2005, an increase of 1.6 per cent on the previous year.

The increase was in the sales of packages and charter seat-only (2.7 per cent), with continuing significant growth in the online sector. In contrast, ATOL protected scheduled sales fell by 3.9 per cent.

Despite an increase in ATOL protected sales, the growth rate remains slower than that of all air travel. Consequently, the number of ATOL protected sales as a proportion of all air travel continues to fall, with only 56 per cent of air travellers now covered, a decline of 17 per cent in six years.

The number of licences continues to rise. Over 2,335 travel businesses now hold Air Travel Organiser Licences compared with 2,009 at the same time last year. This increase reflects the continuing trend for small businesses to set up holiday operations and take advantage of the CAA`s new Small Business ATOLs (SBA) and third party licensing agreements. There are now nearly 1,000 firms with SBAs.

Richard Jackson, Director of the Consumer Protection Group at the CAA, said:
Although the number of leisure passengers buying unprotected flights direct from airlines, particularly those in the no frills sector, continues to increase substantially, the ATOL scheme still provides the largest UK holiday protection scheme and the only one for air holidays.

However, the proportion of air travel that is ATOL protected has been steadily falling since 1997 and looks set to continue. Unless changes are made to the ATOL protection scheme, the vast majority of air travellers will be left unprotected.

Mr Jackson added: We are pleased that the reduction in administration and costs associated with SBAs has stimulated more small businesses to set up their own holiday operations. Consumers will benefit from greater choice and financial protection. We will continue to look at ways to widen these benefits without undermining protection.