The Air Travel Trust Fund paid out £5.3 million in compensation for travel company failures for the financial year to the end of March 2023.
In total, there were eight failures during the year, seven fewer than in the previous year but the amount of compensation paid was more than double.
The ATT’s annual report shows the biggest collapse was Dream World Travel, which cost the Air Travel Trust £3.34m in refunds to more than 14,000 customers.
ATT also paid out £193,537 to customers of collapse operator Arena Tours, £30,217 for the failure of Explore Montenegro and more than £17,000 following the failure of Fun Travel.
It raised £65.8m in Air Passenger Contributions from 26.6m passengers booked, compared to £37.8m in 2022 and it received £1.17m from liquidated dividends from Goldtrail Travel. It also earned almost £1m in interest.
It has £169m in cash reserves.
The Air Travel Trust Fund said that in January 2023, ATOL protected bookings were the highest on record and in September 2023, ATOL departures surpassed 2019 levels for the first time since the pandemic.
“The performance of travel companies is getting close to full recovery. However, balance sheets broadly continue to show signs of weakness and still need strengthening and repair,” it added.
“Cash flows continue to be stretched by the servicing and repayment of higher debt burdens and the increasing cost of holding this debt, higher demands in working capital driven by tightening of supplier payment terms, inflationary pressures on costs, and the need to invest in marketing to drive demand.
However, it added that ATOL protected bookings are ‘strong for winter 2023/24 and also buoyant for summer 2024’.
“Many industry participants are now accepting bookings far further in advance than witnessed historically, and it is possible booking patterns may continue to evolve further,” it added.