Estimated call of £11m on Atol fund during first year of pandemic

As a result, its trustees have concluded the ATTF has "adequate resources" on which to draw "to continue in operational existence for the foreseeable future", with that period being at least a year.

Concerns, though, have been raised over the longer-term impact of Covid on the package market. "There is still uncertainty about how long it will take the sector to recover, and how this might impact consumer demand for Atol-protected holidays," said the ATT in its report.

"This, in turn, creates significant uncertainty over the income and expenditure of the trust, in terms of reduced APC income and an increase in both the number and aggregate cost of Atol failures." 

However, while the ATT admits the resources at its disposal "may be insufficient to meet the costs of a large or multiple failures", its trustees said it was their expectation the government would "provide additional financial support to the ATT as necessary".

In its report, the ATT acknowledged the timing of the arrival of Covid was fortuitous in some ways, with the majority of affected Atol holders having only taken deposits rather than full balances from consumers. This meant the majority of these failures "did not have a material impact on the trust".

The ATTF was heavily depleted heading into the pandemic following the September 2019 collapse of Thomas Cook, which is estimated to have placed a call on the fund running to almost £500 million.