STA Travel in the UK ceased trading on Friday, the CAA and Abta have confirmed.
The CAA said it would clarify the number of Atol-protected STA Travel customers abroad “in due course”, but said: “Anyone currently abroad will have tickets for their flight home.
“These are still valid and people should check-in as normal.”
The failure came after youth travel specialist STA Travel’s Swiss parent company filed for insolvency and appointed administrators on Wednesday, August 19.
STA Travel employed almost 500 staff across 49 agency outlets in the UK and its head office in London.
The youth and student-travel specialist was an Atol holder, licensed to sell almost 30,000 package holidays a year, but its primary business was as a third-party retailer.
The company was an Abta member.
STA Travel said in a statement on Friday night: “The global impact of the coronavirus pandemic has brought the travel industry to a standstill.
“Over recent months, we have taken decisive measures to secure the business beyond Covid-19. However, sales have not picked up as anticipated due to consumer uncertainties, further restrictions and renewed lock-down measures, which are expected to largely continue into 2021.
“This week, it was announced that STA Travel’s Swiss parent company, STA Travel Holdings AG, had filed for insolvency.
“Today, as a result of that decision, and upon reviewing the UK business, we have been left with no choice but to cease trading with immediate effect.
“Over the coming days, we will be working through the process and how it might impact our operations.”
Farina Azam, partner at legal firm Kemp Little, said on Twitter: “Busy evening spent advising clients on the fallout of STA Travel going into administration. We knew it was coming but still incredibly sad.
“The industry is so interlinked. One retailer fails and multiple tour operators lose customer payments but still have to honour the booking.”
STA Travel customer advice
Flight-inclusive packages will be protected under the Atol scheme and scheduled airline tickets under STA Travel’s Iata licence.
STA Travel also sold packages which did not include flights and are protected by Abta.
Holidays which STA Travel sold as an agent will be protected by the relevant tour operators.
In a statement, the CAA said: “Consumers who have accepted valid refund credit notes or are due refunds for the cancellation of their Atol-protected booking will be able to submit a claim to Atol through our online portal.”
It advised travellers abroad: “Atol will be working with accommodation providers to make sure all affected customers can continue their holiday.
“If for any reason customers are required to pay again for their accommodation or any other part of the Atol-protected booking, we advise them to obtain receipts for payment and submit a claim for the cost. More information is available on our website.”
The CAA is advising Atol-protected consumers due to travel after August 21 that “flight tickets may still be valid but this must be confirmed with the airline.
“If choosing to travel, consumers may be asked to pay again for replacement services of the original package holiday. Provided the services are covered by Atol, they are entitled to submit a claim for a refund.
“Replacement services may include accommodation, transfers or other services but consumers should confirm which services were included in the package holiday on their Atol certificate or booking documents.
“If consumers have a flight-only booking that was Atol protected, they will only be able to make a claim if they are still due to travel and have not received a valid ticket. Otherwise, consumers should speak to their airline, including if the flight has been cancelled or they have received a voucher for a cancelled flight.
“If Atol-protected consumers choose not to travel or their flight tickets are not valid, they will be able to make a claim.”
Atol spokesman Andrew McConnell said: “We understand this will be concerning news for anyone who has booked to travel with the company or has had their booking cancelled.
“However, the Atol scheme exists for exactly this kind of situation and we are making arrangements so that all Atol-protected customers can either continue their holiday and return home as normal or make a claim if they are due to travel.”
McConnell added: “It is a sad day for the industry when a long established business like STA Travel ceases trading, especially one that many may be used to seeing on their high streets.”
An Abta spokesperson said: “The news that STA Travel, a long-standing Abta member, has ceased trading will send a shock wave through the industry, bringing to life the very real pressures travel is under at the moment.
“STA Travel will be a name familiar to most people and this distressing news will sadly affect the livelihoods of hundreds of employees.”
Abta confirmed: “Non-flight packages will be protected by Abta.
“If customers booked a package holiday through STA Travel, and the holiday is provided by another tour operator, they will need to contact the tour operator who should be able to confirm that their booking will go ahead as normal.
“Further information for customers affected can be found at abta.com/statravel .”
Which? Travel editor Rory Boland said: “Most STA Travel UK customers have found it impossible to get refunds in recent months for cancelled package holidays, often for very significant sums of money.
“Anyone with a booking, still waiting for a refund, or those holding a refund credit note, will be able to get their money back through the CAA’s Atol scheme. Flight-only tickets booked with STA should still be valid. Passengers should contact their airline to check.
He added: “The travel industry has endured a disastrous year, and many other companies will be on the brink of collapse.
“The government must urgently step in to provide much-needed support if this industry is to survive the next few months.”
STA Travel was founded by two Australian students in the early 1970s.
It was acquired by Diethelm Keller Group in 1979 and subsequently opened its first retail store, celebrating its 40th anniversary last year.
STA Travel Holding formed part of Diethelm Keller Travel within the Swiss-based Diethelm Keller Group.
The STA name, which originally stood for Student Travel Australia, was subsequently changed to the Student Travel Association and then simply to STA Travel.
STA Travel parent company’s administration
When STA Travel Holding announced it was entering administration on Wednesday it said the process applied only to the Swiss business and “day to day operations may continue” at subsidiaries including the UK business.
However, a spokeswoman for STA Travel UK confirmed on Thursday that the decision by the holding company meant “each division’s country manager and leadership team is now reviewing its own position”.