Low Cost customers to receive ‘very little’ compensation
Customers of failed Low Cost Travel Group are likely to receive just £7.50 each compensation, according to the administrators.
The Palma-based company had lodged a bond of only €1.3 million with the Spanish travel agency regulator, even though it had a turnover of around £500 million a year
Finbarr O’Connell, of administrator Smith Williamson, told The Times that potential claims from customers could be more than £50 million.
He said: "There are about 140,000 customers we believe have lost out. Sadly this means there will be very little back for any claim."
He said compensation will be paid to claimants on a pooled basis so everyone will get back about 1% to 2%. The Group was not ATOL-bonded as it moved its head office to Palma in 2013.
Low Cost Travel Group ceased trading last Friday, after failing to find a new financial backer. In a statement posted on its website, the group said director’s attempts to rescue the company were ‘hampered by the recent and ongoing turbulent financial environment’.
The statement added: "On behalf of LCTG, the directors wish to profusely apologise for the inconvenience and distress that this will cause to customers."
However, they have come under fire for sending emails offering customers huge discounts to book just hours before the company collapsed.
Customers are being advised to contact their airline to check that their bookings are still valid. The Group said that in ‘most’ cases, flights had been paid for and tickets are still valid, but customers are likely to have to pay again for their accommodation or find alternatives.
Those who booked with a credit card and some debit cards might be able to claim compensation from their card issuers while others might be able to make an insurance claim if their policy included supplier failure.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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