Biggest exodus in years as travel companies quit

CONSUMER NEWS:AT LEAST 23 travel companies have not renewed their bonds in the biggest exodus from the trade for years.

With discussions continuing between the Commission for Aviation Regulation and 68 travel agents and tour operators, the commission expects the number of travel companies leaving the business to increase further.

The deadline for renewing travel bonds, without which a company is not allowed to trade, passed over a week ago. The commission received 182 applications from firms to renew their bonds; six brave companies lodged fresh applications.

The Irish Travel Agents Association said it was astonishing that the commission still had 68 pending files when travel companies were required to make licensing applications by the end of last August. Simon Nugent, the association’s chief executive, said this meant that some of the firms that were trading were technically unlicensed.

In 114 of the applications with the commission, it had issued bonds as of yesterday morning, and the companies involved are licensed to trade. This figure includes 81 travel agents and 33 tour operators.

According to a spokesman for the regulator, the remaining 68 applications include some “difficult cases”. It is expected that as many as 10 more operators will retire or opt not to renew their bonds in the current difficult trading environment.

Some companies have yet to make contact with the regulator and appear to be in no hurry, according to the spokesman. There is a further round of licensing next March, but companies that allow their licences to lapse are effectively treated as first-time applicants.

The most prominent company that has yet to complete the licensing procedure is Budget Travel, which recently closed 16 shops with the loss of 75 jobs. The company was due to take High Court proceedings yesterday aimed at forcing the regulator to renew its licence.

Nugent said it was unsurprising that so many licences had not been renewed. Some of the files would have involved companies that had gone out of business during the year. “Even in a good year you’d expect to see 10-15 licences not renewed.”

All tour operators and travel agents trading in Ireland must be licensed and bonded to sell overseas travel. Tour operators are required to post a bond of 10 per cent of their licensable turnover to the bonding scheme; travel agents must be bonded for 4 per cent of revenues.

Twenty-two travel companies have collapsed since July last year. The cost of compensating passengers came to about €4 million; half came from the bonding scheme and half from the Travellers’ Protection Fund.