Atlas Voyage Secure (AVS) have partnered up with PT Trustees to create a a solution to provide assurance to customers that their funds are protected.
Designed to lessen the impact on working capital, ASPP – Advance Supplier Payment Protection Protection – allows trustees to approve the early release of funds knowing that in the event of the trust account holder’s insolvency, any shortfall in customer funds will be protected by the ASPP insurance policy.
The policy will allow PTT clients where permitted to apply to the trustees for the early release of funds where payments to suppliers (typically low-cost airlines) need to be made in advance of travel. The trustees will then be protected up the maximum level of indemnity stated on the ASPP policy.
Administration is simple; the trust account holder (the travel company) would make the customers booking in the usual way and pay the full holiday funds into the Trust account. Suppliers requiring deposits being settled prior to departure would be paid in the usual way i.e., out of working capital (not out of the trust). These advanced payments would then be presented for early reimbursement to PTT accompanied by proof of payment to the supplier. Subject to passing PTT standard checks to validate the request, funds are the released (early) from the trust account to the travel company (ASPP policyholder).
In addition to ASPP, AVS has also launched a Repatriation only policy (Repat).
The policy will cover the costs of repatriating clients of a travel company that are stranded “in resort” following the insolvency of that company.
The policy is designed for non – ATOL travel companies and provides any trust account with the missing element to make it fully compliant with the 2018 Package Travel Regulations. The regulations not only require consumer funds to be protected but also require travel companies to have arrangements in place to repatriate stranded clients.
Trust clients can purchase the Repat product with or without ASPP. With the combination of the Trust and Repat allowing the travel company to fully meet its regulatory obligations to protect consumer funds and repatriate stranded clients following insolvency, consumers can be fully confident in booking with the travel company operating a PTT trust.
There are several Trusts in the industry that currently allow the early release of funds to pay suppliers. This is typically done by protecting these bookings via a Supplier Insolvency Insurance. However, these policies only protect the policyholder against any loses they incur following the insolvency failure of the supplier who was paid with funds released early from the trust. The company will then be reliant on making a successful claim under the policy to make up the shortfall the trust or their working capital. Furthermore, it does not provide any direct protection to the trustees against their own insolvency which in most cases would leave the trust account with a shortfall and hence the trustees inability to refund 100% of consumer funds.
The release of these new products and alternative approach aims to positively contribute to the return of customer confidence in the industry.