Holiday protection levy goes up

The Atol scheme only protects those who have booked package holidays

Package holidaymakers will have to pay an extra £1.50 on the price of their trips from October, to help meet the cost of collapsing tour operators.

The Air Travel Organiser's Licence (Atol) protection scheme, currently £1 per passenger, is going up to £2.50.

The scheme is designed to protect those holidaymakers taking package tours abroad against the financial collapse of their tour operator.

It does not protect passengers who have only bought an airline ticket.

Thousands claimed following the collapse of the XL Leisure Group last year, and the scheme has been in serious financial difficulty ever since.

A number of other companies have also gone under in the recession.

The Transport Minister Paul Clark said he could have raised the price of the scheme by more, but was aware of the extra burden this would place on travellers.

"I believe that £2.50 for the protection that Atol provides represents a good deal for consumers - it is cheaper than stand-alone airline failure insurance and represents less than 0.5% of the average Atol holiday price," he said.