You may hear it shortened to AFAH, although the ATOL Regulations and the Civil Aviation Authority (CAA) use the full phrase. The Regulations describe an agent acting on behalf of, and with the authority of, a disclosed and identified principal that is an ATOL holder.

What the agent must do

From the moment it receives any payment, the agent must be entitled to issue an ATOL Certificate on the ATOL holder’s behalf without checking with it first, and must be able to bind the ATOL holder to the contract. It must work under a written agency agreement that includes the CAA’s Schedule of Agency Terms, names both parties and is dated. Under those terms the agent must:

• name the ATOL holder that sells and protects the trip on any publicity, including websites and brochures, that features a flight or flight-inclusive package it offers

• show on receipts which money is ATOL protected and which is not, so its own booking fees appear separately

• hold customers’ money on behalf of the trustees of the Air Travel Trust, passing it to the ATOL holder for as long as the holder has not failed

An example

A high street agent sells a tour operator’s flight package. It issues the operator’s ATOL Certificate when it takes the deposit and shows its own £25 booking fee separately on the receipt as not ATOL protected.

Watch out for

• For packages, the exemption only applies if the agent’s part is limited to selecting, or letting the customer select, from a closed group of services that the ATOL holder makes available, and the ATOL holder, not the agent, takes on and performs the organiser’s duties under the Package Travel Regulations. An agent that builds its own flight-inclusive package is the organiser and needs ATOL cover in its own right.

• An agent for an ATOL holder is different from an airline ticket agent, which is appointed by an airline and issues a confirmed ticket immediately.

• Without a compliant written agreement, both the agent and the ATOL holder are in breach.