Air passenger levy to increase

Holidaymakers travelling by air are to be hit with a increase in the levy charged by the industry's insurance scheme, the Department for Transport announced today.

Junior minister Paul Clark told MPs the Air Travel Organisers Licence (ATOL) charge would be increased from £1 to £2.50 per passenger from 1 October.

The move will help fill a black hole in the insolvency protection fund operated by ATOL following the collapse of tour operator XL last year.

In a written statement Mr Clark said: "I am aware of the extra burden this will place on travel companies and consumers at difficult time, which is why I have agreed to an increase at the bottom of the range consulted on by the Civil Aviation Authority."