What went wrong with Flylolo and what is the impact for passengers?

The key questions and answers about what happened with Flylolo

Everything you need to know about the collapse of Flylolo (iStock)

A start-up carrier called Flylolo has just told 3,000 people who had bought half-term holiday flights between Britain and the Canaries that their flights are cancelled.

Here are the key questions and answers.

What has happened?

A company called Flylolo, based in West Sussex, has been selling half-term holiday flights from Gatwick, Glasgow and Manchester to the Canary Islands.

But the 3,000 passengers booked to fly to and from Fuerteventura, Lanzarote and Tenerife were informed just days – and in some cases hours – ahead that their flights were grounded.

Flylolo has no planes. The idea was to charter other airlines to do the actual flying. Flylolo would hire them only for dates of high demand, and not have any obligation for off-peak times.

In its terms and conditions, Flylolo says: “The flights referred to in our program are planned and operated by the designated airline on specific aircraft many months in advance.

“We reserve the right to change airlines or aircraft types at any time.”

Is it legal to sell tickets without actually having any planes?

Yes, and 24 years ago a tiny airline called easyJet started flying between Luton and Scotland with two aircraft borrowed from GB Airways – which, when easyJet became much bigger and more successful, it bought.

The Civil Aviation Authority has licensed Flylolo to sell 27,600 seats in the current year.

What went wrong with Flylolo?

Paul Dendle, founder and chief executive of Flylolo, says: “The issue was the aircraft we thought we had a firm agreement on was withdrawn.”

He says he has been working 18 hours a day to find an alternative airline, but the costs were too high. The company has limited funds, he says, as its capital base “has been eroded by the economic malaise caused by Brexit”.

Mr Dendle says: “In desperation we had been in discussions all last week to secure a deal with a couple of airlines. We offered them equity in the company or additional profit share if they would supply the aircraft.”

What happens now to the passengers?

Flylolo says they will all get their money back within two weeks. However, that is of little comfort to families who have spent thousands of pounds on flights, with accommodation booked and paid for separately. They have little chance of recouping these “consequential losses”. Few alternative flights have space, and seats that are available are very expensive.

Aren’t passengers whose trips are cancelled entitled to replacement flights?

Yes. Under European air passengers’ rights rules known as 261/2004, an airline that cancels a flight would have to pay each traveller €400 and find (and pay for) the best available alternative flights.

But Flylolo says: “Any claims should be directed to the airline, we cannot accept any claims under regulation 261/2004.”

As no airline was confirmed, there is no one from whom to claim.

How does Flylolo sell its tickets?

Online. Earlier this year it did a fair amount of promotion, with advertisements promising “less stress more enjoyment”.

During a round of promotional interviews earlier this year, the founder, Paul Dendle, said: “The budget airlines drive prices up for the school holidays.

“They lose money in May-June, they lose money in October, and they recover the moneys they’ve lost in those three months by charging higher prices for the July, August, September dates.

“We look to just put aircraft on for the peak season, from July to September, and we can actually undercut the low-cost carriers but we can also include lots of things within our prices that are extras with others.”

According to passengers who have contacted The Independent, a significant number of bookings were made by clicking through on the fare-comparison website, Skyscanner.

A spokesperson for Skyscanner said: "We truly sympathise with those travellers whose flights with Flylolo have been cancelled and we are doing our best to find out more information from Flylolo.

"As a business we pride ourselves on putting the traveller first and always seek to assist travellers where we can to help them understand what action they can take.

"Travellers can be reassured that Flylolo is Atol protected, meaning anyone impacted by this will receive a full refund – and we have been advised by Flylolo that this will be within 10 working days.

"We are continuing to try and follow up with Flylolo to get further additional information for those travellers affected."

What does the Civil Aviation Authority say?

“We are aware that flights planned by tour operator FlyLolo from Glasgow to Tenerife South and Arrecife in Lanzarote this weekend will not go ahead.

“Where an ATOL licenced tour operator is unable to deliver the services it has sold to its customers, we would expect them to refund passengers in full.

“We therefore advise Flylolo customers to contact the operator directly for further information.”

The airline’s telephone number is 08444 720737, and its email is team@loloflights.com.

Travellers currently abroad might expect to be protected by the Atol scheme, but as Flylolo is still a going concern – currently selling flights for the Christmas season – the Civil Aviation Authority (CAA) will not step in.

What do we know about Flylolo’s founder?

In 1984, Paul Dendle founded the seat-only provider, Avro, and sold it 11 years later to the owners of Monarch Airlines. On his blog, he writes: “30 years ago I started Avro Plc which was fore runner to the no frills carriers, we sold cheap seats to the masses sending people abroad on cheap flight only deals, one of our biggest sellers was Alicante and we had 20 aircraft at Alicante airport on some nights.”

He was re-elected in May 2019 as a Conservative councillor on Arun District Council in West Sussex.