Lowcost Travel Group chief executive Paul Evans says he should be applauded for moving his Lowcost Holidays division to Spain following damning criticism from UK regulator the CAA.

The company, which is based in Majorca, became officially Spanish last night placing it under Spanish package rules and the EC Package Travel Directive.

The CAA says there was lack of sufficient notice and unclear information to customers with bookings and has advised them to consider their options.

Lowcost offered customers the chance to cancel with a full refund with seven days to decide or continue their holiday under the new arrangements with the Spanish firm.

In a strongly worded response to a CAA note released earlier, Evans said: “I have done everything legally and by the book. We are protecting customers offering package and accepting liability.

“I have embraced the rules. We should get a little support. I should be applauded for what I’ve done. We have given all the information to the CAA and they have been fully informed.”

However, Andy Cohen, head of Atol, said: “By giving the regulator such short notice of these changes and failing to allow their customers reasonable time to consider their situation, Lowcostholidays’ behaviour is unacceptable.

“We simply cannot say at this point what the changes might mean in practice for consumers, and for that reason think that anyone with a Lowcostholidays booking should very carefully consider their options.”

Evans pointed out that he lives and works in Spain and is married to a Spanish woman and Lowcost has been operating out of Spain for four years.

He added that he could see the way things were going with the Package Travel Directive reform and harmonisation of rules across Europe.

“You have to reflect a pan European business,” he said. “We reflect the pan European nature of our business. We are talking about harmonisation here.

“We have been arguing about this for 10 years. You have airlines in the UK still not paying for Flight-Plus. Our business is in Spain  have seen the writing on the wall with the PTD and we have decided to embrace it.”

The CAA was notified of Lowcostholidays intention to move their business to Spain late on Wednesday October 30. The transfer occurred at midnight on October 31.

In view of the very short notice we were given of this change, the CAA said it was unable to confirm for passengers what protection arrangements apply to their bookings.

“We are still carefully assessing the situation to ensure that UK consumers’ rights are protected,” it said. The CAA said will update consumers as a matter of urgency.

The CAA said the UK Atol scheme ensures consumers are protected from holiday company failure, and if their company fails they can finish their holiday and return to the UK as planned – or get their money back if they haven’t yet travelled.

“It is vital that consumers who are not covered by Atol are given clear information on how their money is protected and what to do if something goes wrong.

“Consumers now have seven days to decide if they are happy for their holiday to be transferred to the new company, or would like a refund. The CAA advises them to carefully consider their options on the basis of the information made available to them.”

Evans added: “As we globalise the group, we are centralising our lowcostholidays business and simplifying our structure.

“We now employ over 100 staff in our Palma centre, and having a single trading entity through which all of our holidays are sold means we can achieve significant efficiencies and cost savings.

“It means our administration, operations and regulatory functions can be centralised. “

“It also means all of our pan European businesses will be regulated under Spanish law and effectively under the overarching regulation across Europe of the EU Package Travel Directive.

“Customers will benefit from full package travel protection under Spanish law, consistent with the EU package travel regulations.”