Tour operator Holidays 4 UK, which was due to take about 50,000 British holiday-makers to Turkey this summer, has gone bust.
About 12,000 customers of the firm are currently abroad and had expected to return on flights arranged by the company, which trades as Holidays 4U and Aegean Flights. It is understood all customers overseas, largely in the cheaper Turkish holiday resorts, can expect to be repatriated by the Civil Aviation Authority under the Atol consumer protection scheme.
Travellers yet to take their holiday will also be entitled to compensation under the Atol scheme. The rescue will cost the CAA about £9.5m, of which about £4.5m will be covered by Atol bonds and other security lodged by Holidays 4 UK.
It is unusual for a travel business to fail so early in the peak summer season, when cash inflows are traditionally strongest. Holidays 4 UK, which is owned by two Turkish-British families and has been trading from Brighton for 17 years, is now being run by administrators from Pricewaterhouse Coopers.
"The company has suffered because of the difficulties faced by the travel industry during 2010 and 2011, as a result of the economic downturn," said Ian Oakley-Smith, joint administrator and director at PwC.
Holidays 4 UK's failure was triggered by dire trading in May, June and July. The company is believed to have approached the CAA about releasing some security to allow it to continue trading but was rebuffed. Barclaycard, which processed payments for the business, is also believed to have kept a very tight rein on Holidays 4 UK's funds recently, anticipating a possible collapse.
Last year fellow Turkish budget holiday specialist Goldtrail, based in Wimbledon, collapsed in July, also appointing administrators from PwC. This failure provided a temporary boon for Holidays 4 UK. The company had a turnover of about £35m a year and was licensed to carry 100,000 passengers under the Atol scheme.
Some 15 staff at the firm's Brighton office were told of its collapse on Wednesday morning.
About 12,000 customers of the firm are currently abroad and had expected to return on flights arranged by the company, which trades as Holidays 4U and Aegean Flights. It is understood all customers overseas, largely in the cheaper Turkish holiday resorts, can expect to be repatriated by the Civil Aviation Authority under the Atol consumer protection scheme.
Travellers yet to take their holiday will also be entitled to compensation under the Atol scheme. The rescue will cost the CAA about £9.5m, of which about £4.5m will be covered by Atol bonds and other security lodged by Holidays 4 UK.
It is unusual for a travel business to fail so early in the peak summer season, when cash inflows are traditionally strongest. Holidays 4 UK, which is owned by two Turkish-British families and has been trading from Brighton for 17 years, is now being run by administrators from Pricewaterhouse Coopers."The company has suffered because of the difficulties faced by the travel industry during 2010 and 2011, as a result of the economic downturn," said Ian Oakley-Smith, joint administrator and director at PwC.
Holidays 4 UK's failure was triggered by dire trading in May, June and July. The company is believed to have approached the CAA about releasing some security to allow it to continue trading but was rebuffed. Barclaycard, which processed payments for the business, is also believed to have kept a very tight rein on Holidays 4 UK's funds recently, anticipating a possible collapse.
Last year fellow Turkish budget holiday specialist Goldtrail, based in Wimbledon, collapsed in July, also appointing administrators from PwC. This failure provided a temporary boon for Holidays 4 UK. The company had a turnover of about £35m a year and was licensed to carry 100,000 passengers under the Atol scheme.
Some 15 staff at the firm's Brighton office were told of its collapse on Wednesday morning.
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