The Civil Aviation Authority has rejected the suggestion that its demand for financial guarantees led to the failure of tour operator Holidays 4U earlier this month.
Holidays 4U director Mete Faks blamed the collapse on August 3 on a lack of cash after the CAA required the Turkey specialist to provide guarantees worth £4.5 million in order to renew its Atol licence in March.
Faks told Travel Weekly he found it increasingly difficult to operate because of the CAA’s demands. He said: “If we had that cash we would still be trading.”
However, the CAA said this was not the way it regulated the Atol consumer-protection scheme. A CAA spokesman said: “The CAA considers every application for a new Atol or renewal of an existing one on the merits of an individual company’s circumstances.
“We balance our duty to protect consumers and ensure holiday companies operate in a sustainable, well-managed fashion with a desire to ensure the CAA’s regulatory functions do not cause disproportionate burdens on the industry.”
The spokesman added: “The CAA aims to support competition so consumers can enjoy a wide variety of holiday options.”
But he said: “Ultimately, the CAA’s role is to ensure companies delivering holidays are properly financed and will be able to provide the holidays they have sold.”
The CAA has a record of nursing travel firms in danger of failing through to a less damaging time outside peak season – actions that have sometimes drawn criticism from other tour operators. Its consumer protection group would certainly not want a company to fail in August, when the problems for holidaymakers – and the cost to the Air Travel Trust fund – would be at their height.