The Civil Aviation Authority (CAA) is investigating the failure of an online agency that made a big dent in consumer-protection funds after finding the company’s trust fund light of customers’ cash.

Shenoy & Co, a Wembley-based agency trading online as Reliable Holidays and Economy Travels, went into administration last November in what appears to have been a ‘bust-out fraud’.

The company was overtrading its Atol to the extent its failure cost the Air Travel Trust (ATT) fund £773,000, making it the fifth most‑costly failure of the year.

Shenoy held a Small Business Atol to carry up to 500 passengers, provided a bond of £10,000 – suggesting it had traded untroubled for three years – and had a trust account, although the CAA was unaware of this. It failed with 2,165 advance bookings, more than four times its licence.

The ATT trustees registered concern at the failure in their annual report this month, noting: “The trust account was found to contain substantially less than expected.”

A damning administrator’s report noted: “The insolvency was caused by [Shenoy’s] failure to deliver cheap airline tickets sold over the internet.

“The director attributed this to a dispute with the wholesaler…based in Mumbai. The offices [in Mumbai] were found to be little more than a corrugated iron shack. It appears the director may have absconded to India.”

The administrator said  “there is no prospect” of creditors seeing any money. The CAA continues to investigate.