ATT sanctions legal action over Goldtrail collapse

ATT sanctions legal action over Goldtrail collapse

Trustees of the Air Travel Trust are considering legal action against those responsible for the Goldtrail Travel collapse last July which cost the trade’s consumer-protection fund £24 million.

The trust’s annual report, published today, confirms Goldtrail “was significantly overtrading its licence in the months prior to going into administration”. It reveals the trustees are considering their legal options “in connection with this and other potential breaches”.

The collapse of Goldtrail just ahead of the peak summer season took industry regulator the CAA by surprise and played a major role in the collapse the following month of Flight Options (Kiss Flights) at a cost of a further £19.4 million.

The Air Travel Trust report notes: “Kiss was contracted to share a significant number of whole-plane charters with Goldtrail. The Goldtrail collapse therefore had a major impact on the Kiss business.”

Despite a nine-month investigation into Goldtrail, the report notes: “There remain a number of unanswered questions concerning the circumstances surrounding Goldtrail going into administration. . . The trustees have instructed the CAA to pursue any necessary action to recover their losses.”

The trustees also note: “This failure highlighted the poor standards of customer documentation issued by some in the travel industry, leading to unacceptable delays in refunds to holidaymakers.”

The CAA dealt with 146,000 refunds and 47,000 repatriations in the course of the year, with more than half of these from Goldtrail.

A tightening of documents issued to customers forms an important part of the government’s Atol reform, currently the subject of consultation with the industry.

Goldtrail was licensed to carry 180,000 Atol-protected passengers a year, but had more than 23,000 abroad and 75,000 advance bookings when it collapsed – considerably more than would be expected.

The trust fund ended the year to March £42.3 million in debt, despite an income of almost £47.7 million.

The total bill from failures in the year was £46.8 million – with £43.25 million of this due to Goldtrail and Flight Options. The fund’s income covered this amount with £900,000 to spare. But the costs of administering the fund’s debt and of insurance against a major failure - valued above £50 million - pushed the deficit higher by £10.5 million. Insurance alone cost £9.5 million.

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