Budget holiday brand lowcostholidays has filed for administration leaving the holiday plans of thousands of Brits hanging in the balance.
Confirming the new on the company's website, a statement read: "We deeply regret to announce that the lowcosttravelgroup has ceased to trade on 15 July 2016, following exhaustive attempts by the group's directors to rescue the group, which has been hampered by the recent and ongoing turbulent financial environment."
Smith & Williamson, has been appointed administrator, revealing in a statement that 27,000 customers of lowcostholidays are currently at resorts with 110,000 customers booked. According to reports holidaymakers currently in resorts could be asked to pay their hotel bills again.
In 2013, the Civil Aviation Authority (CAA) warned travellers not to book with lowcostholidays after the company relocated to Spain, meaning that it was no longer protected under the CAA's ATOL scheme which ensures customers can get their money back if their travel company goes under. Lowcostholidays had, however, countered the claims stating its holidaymakers were protected under a Spanish scheme.
Lowcostholidays customers have been informed that flights home will remain valid but hotel owners and companies offering services like airport transfers may ask for bills to be settled again. Lowcostholidays advises on its site any extra payments customers are asked for can be claimed back via their travel insurer, credit card company or the government of the Balearic Islands, where lowcostholidays is licensed.
Smith & Williamson added the decision to file for administration "would affect many customers who have purchased flights or holidays, some of whom are on holiday in resorts and some of whom have not travelled as yet. All flights as regards those currently in resorts have been paid for and hence customers will be able to fly home when their holidays are over.
"Unfortunately, as regards customers who have not travelled, a small number will have problems as regards their flights not having been paid for, and many will have problems as regards their hotel rooms not having been paid for."
The lowcosttravelgroup was founded in 2004 by Paul Evans, who started his career as a manager for Club 18-30. The company, which has offices in the UK, Spain, Switzerland and Poland, has already made the majority of its 451 staff redundant, including 120 members of staff based at Gatwick. The latest filed accounts from the group showed it has sold £477m worth of holidays in the year to October 2014, with pre-tax losses of £47,000. The company's auditors resigned in March, after two directors left the company in December.
Speaking to the Guardian, Smith & Williamson's Finbarr O'Connell, said a number of factors - including the EU Referendum - had contributed to the group's collapse.