Lowcost Travel Group haemorrhaged cash as it neared collapse last month and there are no clear answers as to what happened to the money.
The company ceased trading owing an estimated £75 million, according to its joint administrators, with just “a few million pounds” available to meet creditors’ claims.
Lowcost Holidays, the group’s Palma-based agency, had 112,000 forward bookings covering about 270,000 holidaymakers.
Another 27,000 were abroad when the company failed, many with hotels unpaid.
Yet company terms and conditions demanded payment a minimum 84 days in advance of travel. When it ceased trading on July 15, it would have taken full payment from customers due to travel up to October 6.
Travel Weekly understands the group handled close to £1.5 million a day in revenue in its final 10 days of trading.
Lindsay Ingram, chairman of the Association of Atol Companies, said: “Where has all the money gone? You can’t say the money has come in and gone out. A lot of hoteliers have not been paid. So what has happened to it? And to whom is Lowcost answerable?”
Lowcost Holidays relocated to Majorca in 2013, removing itself from the Atol scheme and CAA regulation. The CAA has declined to comment on the failure, other than to say Flight-Plus bookings with Atol-holders that used Lowcost Beds as accommodation provider “will be protected by the Atol-holder”.
However, Ingram said: “The CAA is concerned about the potential impact. There is a whole gamut of issues that could cause problems.”
Finbarr O’Connell of Smith and Williamson, acting as joint administrator with Lane Bednash of CMB Partners, said: “We have a duty to investigate what did go on.”