What ATOL is

ATOL stands for Air Travel Organisers’ Licensing. It is a financial protection scheme run by the UK Civil Aviation Authority (CAA) on behalf of the Secretary of State for Transport, and the CAA dates it to 1973. If a travel business that holds an ATOL fails, the scheme makes sure its customers are not left stranded abroad or out of pocket.

In practice that means:

• customers who are abroad when the business fails can finish their trip and get home, with replacement flights arranged where needed

• customers who have not travelled yet can claim back what they paid for the protected booking, as long as the claim reaches the scheme within 12 months of the CAA publishing notice of the failure

• the cost is met from the Air Travel Trust, which is funded mainly by the ATOL Protection Contribution paid for each passenger booked, with any bond the failed business held used first

ATOL is not travel insurance. It covers flight-inclusive packages and some flight-only bookings. It does not cover bookings without a flight, airline delays or cancellations, complaints about quality, illness, injury, missed transfers or lost luggage.

The law behind it is the Civil Aviation (Air Travel Organisers’ Licensing) Regulations 2012. They were updated on 1 July 2018, the same day the Package Travel Regulations 2018 came in, to use the same definition of a package. At the same time the old Flight-Plus category was abolished, and those bookings are now treated as packages or, in some cases, linked travel arrangements.

Who needs an ATOL

In the UK, only three kinds of business can sell flights:

• the airline operating the flight

• a business that holds an ATOL and is acting within its terms

• a business that is exempt, for example because it sells as an agent for an ATOL holder

Breaking this rule is a criminal offence that can lead to a fine or up to two years in prison.

The rule covers package holidays that include a flight and flight-only sales. It also applies to businesses based outside the UK that sell to UK customers. Since 2018 it has also covered businesses that book flights “as agent for the consumer” and businesses that help another firm sell a flight while handling the customer’s payment.

For ATOL purposes a package currently has the same meaning as in the Package Travel Regulations: at least two different types of travel service for the same trip, such as a flight and a hotel, combined in one of the ways the law sets out. From 6 April 2027 the Package Travel Regulations add a new type of package that the ATOL Regulations’ own definition does not include, so the two will no longer match exactly. Our Package Travel Regulations guide explains that definition in full.

When a flight-only sale does not need ATOL protection

Some flight-only sales sit outside ATOL. The main ones are:

• the airline selling its own flights

• an airline ticket agent appointed by the airline under a written agreement, which hands the customer a confirmed ticket as soon as they pay and tells them it is acting as the airline’s agent

• an IATA-accredited agent with ticketing authority from the airline that sells direct to the traveller, issues the ticket immediately and states on its invoices and receipts, in wording the CAA sets, that the flight is sold as agent of the airline and is not ATOL protected

• a business that pays the airline the full fare at the time of booking, has the airline issue a confirmed ticket straight away, passes it to the customer and states on all invoices and receipts that the sale is not protected under the ATOL scheme. This route is not open if the airline reserves the right to refuse passengers who did not book direct

These routes depend on a confirmed ticket being issued straight away, and they are for flight-only sales, not packages. A deposit or seat-only booking without an immediate ticket generally needs ATOL protection unless another exemption applies.

The ways to sell under ATOL

There are several routes, and the right one depends on how you sell and how big you are.

Holding your own ATOL

The CAA offers four types of licence:

• Standard ATOL has no trading restrictions. A new licence holder needs a bond, starting at 15% of licensable revenue with a minimum of £50,000, which normally reduces each year and ends after four years.

• Small Business ATOL is for businesses with no more than 500 passengers and no more than £1 million of licensable revenue a year, limits that also apply to the bookings held at any one time. It needs a bond starting at £50,000, which reduces in the same way.

• Trade ATOL is for businesses that only sell to other ATOL holders. The CAA’s Types of ATOL page lists a £10,000 bond, but its bonding policy gives a different figure, so confirm the current requirement with the CAA.

• Franchise ATOL is an ATOL granted through membership of a CAA-approved franchise. There is no ATOL bond, because the franchise operator (which the CAA calls the Franchisee) gives the CAA guarantees instead, and you apply through the franchise operator first.

Limited companies applying for a Standard ATOL or a Small Business ATOL need at least £30,000 of paid-up share capital.

Licences run for up to a year and expire on 31 March or 30 September. If a licence is not renewed in time, the business must stop all ATOL business straight away, including taking balance payments on existing bookings.

Joining an Accredited Body

A member of an Accredited Body does not hold its own ATOL. It trades under the Accredited Body’s licence and can issue ATOL Certificates, with no bond or CAA financial test of its own, and the Accredited Body is responsible to customers as if it were the member.

Selling as an agent for an ATOL holder

Many travel agents sell flight-inclusive holidays as agents for ATOL holders rather than holding their own licence. To do this you need a written agency agreement with the ATOL holder that includes the CAA’s Schedule of Agency Terms. From the moment you take any payment, you must be able to issue the ATOL holder’s certificates and bind it to the contract.

The agent route has firm limits. The agent exemption only covers a package if your part is limited to selecting, or letting the customer select, from a closed group of travel services the ATOL holder makes available, and the ATOL holder acts as the organiser. If you put the package together yourself, you are the organiser and the agent exemption does not cover you. Agents must:

• issue the ATOL Certificate as soon as any payment is taken

• show the ATOL holder’s name and ATOL number in their publicity, without using the ATOL logo unless the CAA has given permission

• show on receipts which money is ATOL protected and which is not, with booking fees shown separately

• hold customers’ payments on behalf of the trustees of the Air Travel Trust, passing them to the ATOL holder as agreed unless it fails

Without a correct written agreement, both the agent and the ATOL holder are in breach, and a customer’s claim may be refused and passed back to the agent to refund. Self-employed homeworkers are not treated as workers of the ATOL holder, so they need to sell as its agent or fall within another exemption.

What it costs

The CAA publishes its charges each year. From 1 April 2026 a new application costs:

• £2,606 plus 16.35p for each passenger on the licence for a Standard ATOL

• £1,538 for a Small Business ATOL, plus an advance payment of £1,250 towards the ATOL Protection Contribution

• £981 for a Franchise ATOL member with up to 1,000 passengers

For a Standard ATOL or Small Business ATOL, on top of the application fee there is the bond, renewal fees and an Annual Accountants’ Report signed by an ATOL Reporting Accountant. Then there is the ATOL Protection Contribution (APC). It is £2.50 for each passenger on an ATOL-protected booking, which means everyone aged 2 or over plus any younger child given their own seat, and it has not changed since 1 October 2009. The ATOL holder pays it, and the CAA says it should not be shown to customers as a tax or extra charge. It is still due if the booking is later cancelled.

How to apply

Applications go to the CAA through its ATOL Online portal. For a franchise you start with the franchise operator, and for an Accredited Body you apply to the body. The CAA’s process for a Standard ATOL is:

1. create an ATOL Online account and submit the application and fee, which is not refundable

2. provide financial information: a certified opening balance sheet and at least 12 months of projections for a new business, or your latest accounts and projections if you are already trading

3. have a director complete the CAA’s ATOL Accountable Persons online course

4. usually attend a formal meeting with the CAA

5. receive an offer letter, after which you have up to two months to meet its conditions

The CAA says a decision takes about 12 weeks on average.

ATOL Certificates

The ATOL Certificate is the customer’s proof of protection. It must follow the CAA’s format exactly and shows who is protected, what is protected and which ATOL holder is protecting them. There are four types: Package (Single-contract), Package (Multi-contract), Flight-Only and Flight Inclusive Day Trip.

It must be issued as soon as the customer makes any payment, including a deposit, and taking card details counts as taking payment. If the customer is with you, they get it there and then. If not, it is emailed straight away, or for a phone booking emailed or posted straight away.

Two mistakes to avoid. Issuing the wrong type of certificate matters: if a customer booked a hotel or car hire with their flight but was given a Flight-Only certificate, the Air Travel Trust’s payment policy says it will not make a payment to that customer at all. And a certificate must not be issued for a sale that does not need one.

Advertising and how customers check

Since 1 April 2026, adverts to UK consumers that refer to an ATOL-protected product, such as the price of a flight-inclusive package, must mention ATOL protection in a way that suits the format. The rule is written for ATOL holders, but agents and Accredited Body members must also follow ATOL Standard Term 1, so treat it as applying to your adverts too. The CAA’s guidance says that on social media, where space is tight, a tag such as #ATOLProtected or a pinned comment may be the most appropriate way to do this.

Customers can check a business using the Check an ATOL search on the CAA’s website or the Check for ATOL tool on atol.org. ATOL holders must show their name, ATOL number and the ATOL logo on their publicity. Agents show the ATOL holder’s details instead, so it is correct for an agent’s website not to show the ATOL logo. Falsely claiming to hold an ATOL is an offence.

What is changing

• The Package Travel Regulations change on 6 April 2027, when linked travel arrangements are abolished and some become packages. The government has said the ATOL scheme is outside the scope of that change, so check with the CAA how your sales will be treated.

• A wider reform of ATOL has been discussed for several years. The CAA says it expects the next consultation to be a joint one with the Department for Transport, and it has not given a date.