The government wants a clear solution to the industry's financial protection mess and is likely to reject proposals for a new "agents' Atol", the Civil Aviation Association has predicted.

David Moesli, deputy director of the CAA’s consumer protection group, said he was confident the Department for Transport was determined to bring clarity to the issue.

He told a Chartered Institute of Marketing Travel Industry Group seminar that the XL Leisure Group collapse last September had convinced the government that something had to be done.

A consultation on changing the regulatory regime is now expected to start in October, Moesli said.

“It looks pretty much like they want to bring in any sale that looks like a holiday within the financial protection regime with the possibility that they will bring airlines who sell ‘flights plus’ in as well,” he said.

Moesli said new Abta chairman John McEwan’s plan for an agent Atol might not find favour if it were considered to be too confusing for customers.

“I’m not sure how that fits together,” he said. “The question is whether the consumer will be happy having two classes of Atol, one where they are completely protected under Atol and one which they are not.”

The government’s plan could see all non-air packages brought under the current Atol regime, or under some parallel protection arrangement, Moesli said.

It could also look at bringing in low-cost airlines that sell other holiday components on a “click-through” basis into the protection regime.

“I think the government is looking at drawing clear lines for the consumer so they can give better guidance to the consumer as to what they should be looking for when they buy a holiday,” Moesli said.

“From the government’s point of view it is going to be very much about the issue of consumer clarity and that will probably be above any other considerations. 

“They are going to look for consistency and any system which people propose which is of a two-tier nature is probably not going to be acceptable.”