Lowcost Travel Group ceases trading

Lowcost Travel Group ceases trading

Lowcost Travel Group has ceased trading.

The online travel agent (OTA), which has its head office in Palma, Majorca, closed its office and sent staff home today at 3pm. It has 27,000 customers overseas and 110,000 forward bookings.

Administrators have been appointed and a notice has been posted on the company’s website. A total of 451 staff are being made redundant, including 264 in Krakow, 120 in Gatwick, 60 in Majorca and seven in Switzerland.

In 2013 the CAA issued a statement warning holidaymakers to be cautious about booking with the company. It came after the OTA announced it was moving its base to Majorca and would therefore no longer be required to offer consumer protection under the UK system.

In September last year Lowcost confirmed redundancies would be made as it centralised core functions to new offices in Poland to drive cost efficiencies and maximise profits. It moved its marketing, IT, sales, aviation and customer services divisions to Krakow.

The company was set-up in 2004 and claimed to carry around two million passengers a year. Sources told Travel Weekly last week that Lowcost had been due to receive extra funding towards the end of last year however it didn’t materialise and as a result a string of senior redundancies were made.

The CAA said it was aware of the failure, but confirmed Lowcost has no Atol licence.

Abta confirmed that Lowcost was no longer a member, and its Spanish base meant it was not covered by UK financial protection schemes.

It also warned those with forward bookings to check on all elements of their travel plans before departure.

A statement said: “We would strongly advise you to check with your travel provider if you booked through one or with your airline to determine if your flight seats remain available and to separately check with any accommodation to determine if your booking is secure.

“If in any doubt, we recommend that you contact your local Citizens Advice or Trading Standards Department (see your local telephone directory).

“Most standard travel insurance policies do not include travel organiser failure however we would recommend you check your insurance policy along with contacting your credit or debit card company, if that is how you paid.

“We strongly recommend that you satisfy yourself in relation to any travel arrangements before departing.”

Steve Endacott, chairman of Teletext Holidays, said: “With the exchange rate being so low OTAs are really exposed as their pricing strategy is out of line with the major tour operators who have hedged.

“This is not a problem if you have a strong balance sheet, but if you have a weak balance sheet then this will push you over the edge.”

Endacott added: “This is the first time that there has been a major collapse that will really hurt the UK customer because there is no UK bonding in place.

“A lot of people are completely financially exposed. This will naturally make people revert to the traditional tour operators who have Atol licences and I wouldn’t be surprised if the Atol logo will now become even more prominent than it’s ever been before.”

Manchester-based website Low Cost Deals, which specialises in Club Med, Mark Warner, Kuoni and Titan, has tweeted to clarify that it is a completely separate company from Low Cost Travel Group.

The tweet said: “Low Cost Deals would like to clarify that in no way are we associated with Low Cost Travel Group. Your Holidays are fully bonded protected under both the Atol and Abta protection scheme.”


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