Holidays 4U has collapsed: what happens next?

'The Independent Traveller' answers your questions

Q. What's happened?

The Brighton-based budget tour operator, Holidays4U, which also traded as Aegean Flights, has collapsed. It sold cheap holidays to the Bodrum and Dalaman areas of Turkey using charter flights operated by the Turkish airline, Onur Air.

Like many mainstream Mediterranean holiday companies, the firm has had a lousy first half of the year. It appears that the firm wasn't taking in enough cash to pay its bills.

Q. Are holidaymakers currently in Turkey stranded?

No. The Civil Aviation Authority (CAA) is organising "rescue" flights that will largely mimic the original schedule, with most passengers arriving back at the right airports at approximately the right times. They should not have to pay anything extra for either flights or accommodation: "The CAA is working to ensure all protected Holidays 4 U package holiday customers who are overseas can stay in their accommodation until they are due to travel home. If customers are asked to pay again for accommodation, they should send a claim to the CAA on their return home so that a refund can be considered."

If travellers in resort have concerns, they can call the CAA on +44 161 444 5810, though this line is expected to be very busy.

Q. What about people who have yet to travel?

Sadly, their holidays are cancelled. They should not turn up at the airport. Instead, they should contact the CAA (0844 4933 037; www.atol.org.uk) to begin the slow process of claiming a refund of their holiday price. This is likely to be a slow business, with no prospect of refunds arriving before the end of the summer.

If you have booked through a travel agent, it is possible that they may agree to book you a replacement holiday at no extra cost, and take payment when your refund comes through from the CAA. This is not mandatory, and in practice, it is unlikely that many people will benefit from agents' generosity.

Q. Will I be able to find a replacement holiday?

Yes; there is plenty of capacity around (which is one symptom of the problems in the industry), though you may end up paying significantly more for the privilege. In the event of a substantial collapse such as this one, other holiday companies take advantage of the spike in demand to raise prices.

Q. Will everyone get their money back?

In principle, yes - though there is a small sub-set of holidaymakers who could lose out financially. Anyone who bought seats through Aegean Flights and accommodation as separate components is likely to find that the hotelier or villa owner (or their agents) will not give a refund. "The accommodation is still there, the fact you can't get here isn't our problem," is likely to be the gist.

Q. Who's next?

Even if I knew, I couldn't say.

Q. This is becoming an annual tradition - how does it happen, and how can the government let it happen?

Because of the nature of the travel industry, which is based on optimism. People stump up cash in the expectation of a well-deserved holiday. Almost always, that is what is delivered. Companies agree to contracts with accommodation suppliers and airlines, again in a spirit of optimism that there will be enough buyers at high enough prices. Sometimes, this is misplaced.

Should the government do more? It's hard to see how, without raising barriers to new entrants. But questions will be asked about how well tour operators are policed by the CAA, and whether the monitoring procedures are robust enough.