Agents holding payments for collapsed Aito short-break specialist operator member Cities Direct are being told not to refund customers at this stage.
The message came from the Civil Aviation Authority as it confirmed the failure of the Cheltenham-based company.
The firm traded under the names Cities Direct, City Breaks Direct, European city breaks, Holiday Gifts Direct, Low cost city breaks, Rome Direct and website www.citiesdirect.co.uk.
The CAA said on its website: “We are currently collating information from the company and will update this page as soon as possible.
“A specific claim form will be available shortly. Please do not use claim forms from other failures as these cannot be accepted.
“If you are a travel agent of Cities Direct and you are currently holding consumer payments which you have not yet paid to Cities Direct Ltd, you are advised not to refund consumers with these funds until you have received instructions from the Air Travel Trust.
“Travel agents will be individually contacted by the CAA with specific instructions for these bookings.”
A message on the company’s website said: “The board of directors is sad to report that Cities Direct ceased trading on Monday 7th September 2020.
“The business started in September 2000, and we have had an incredible 20 years developing and growing Cities Direct in an ever-evolving industry.
“We have very much enjoyed the experience, and would like to thank our staff, travel industry partners and many loyal customers for all their support over the years.
“We had so many exciting plans for the future of the business, but the impact of Covid-19 travel restrictions has been devastating.”
Cities Direct managing director Jace Quick informed Aito on Monday that the company was closing its doors.
Aito executive director Martyn Sumners said: “Cities Direct had been a member of Aito for nearly nine years and had traded for 20 years. The company had full financial protection in place via the CAA, ABTA and IPP.
“Understandably, in the current very difficult trading climate, they saw a lack of consumer demand and felt that they would be throwing good money after bad if they battled on and borrowed money.
“At Aito, we are hugely sorry about Cities Direct’s demise. Jace and his team will be missed, and we wish them well for the future, whatever they each decide to do as individuals.”
He added: “In such problematic times, while Aito battles to convey to the many government departments to which we report the myriad problems that our SMEs are encountering – without much in the way of reaction or assistance to date – this is a clear indication of the desperate straits that many formerly vibrant companies find themselves in, through no fault of their own.
“We hope that this first Aito Covid casualty signals clearly to government that the many U-turns it has taken over the past six months have severely shaken consumer confidence when it comes to booking overseas holidays. The entire outbound travel market is under intense pressure.
“We need government support to enable us to survive and to continue to pay our usual enormous amounts of tax into the Exchequer for the greater good.
“The alternative is too depressing for words and involves heavy demands for government assistance via claims for social security and housing assistance from the industry’s hundreds of thousands of employees.”