News

CRUISE and long-haul specialist Festive Holidays has collapsed after a double blow wrecked forward bookings.

Management admitted the company suffered massive losses as a consequence of disasters that hit both sides of its business. In July, its charter cruise ship Ocean Glory was deemed unfit for use, while last month’s failure of Canada 3000 wiped out a huge chunk of its air-inclusive business.

The impounding of the ship alone is believed to have cost the operator £2 million in sales.

ABTA is now expected to face a bill of up to £500,000 to bail out holidaymakers.

Huw Jones, senior manager for liquidators Solomon Hare, said: “We looked at putting together a rescue package but when we saw the books, we realised it was not feasible.

“The major reasons for the failure appear to be the impounding of the ship and the failure of Canada 3000. Like many companies it also witnessed some reduction in trade after September 11.

“The crux of it is that Festive was in a somewhat challenged state and was unable to meet its commitments.”

Jones said the “door remains open” for a third party to rescue Festive but added it was now “highly unlikely”.

Greek-owned Ocean Glory was chartered by Festive in the summer and, although it satisfied Greek authorities, was impounded when it arrived in Dover, losing Festive a major revenue stream. It did not make a single cruise during the season and was sold for scrap.

ABTA said 300 Festive customers are currently on coach trips overseas. Head of consumer affairs Keith Richards said the association could face a £500,000 bill to compensate customers with forward bookings. The Civil Aviation Authority, which handles air-based bookings in the event of a failure, has called in Festive’s bond.

Around 140 passengers are abroad on air packages with 900 still to travel.