Travel: Another summer over, another tour operator collapses

This week, the Monday morning casualty was SunTours, whose financial failure wrecked the plans of thousands of British holidaymakers. Simon Calder assesses the damage from the latest collapse in the chequered history of Britain's package holiday industry.

Q British travellers are used to tour operator collapses. Was this one a surprise?

A Yes. While it's true that collapses normally take place in autumn, when all the bills come in, no one was expecting a big bankruptcy this year. The whole travel industry has had a bumper summer, with prices firm and demand especially high in SunTours' main market, Turkey.

Q There's a lot of confusion about company names in the travel industry. Who exactly was SunTours, and how important was it?

A SunTours, a Turkish-backed company, was nothing to do with Airtours, Britain's second-biggest operator, or Sunworld - another relatively large and successful holiday firm. In terms of numbers, SunTours was substantial but distinctly second-division, taking about 135,000 British people abroad each year.

Q What happens to people who've booked with SunTours - or those already on holiday?

A The several thousand British holidaymakers at present abroad with the company are being brought back more or less on schedule. No SunTours customer will be allowed to begin their holiday - the chances are that there wouldn't be a plane to take them anyway. But the Civil Aviation Authority (CAA), which polices the package holiday industry, will make sure they get all their money back under the ATOL bonding scheme.

Indeed, although the CAA has a dedicated line for SunTours clients (0171- 832 5600), there should be no need to call: within hours of the collapse, CAA staff were sending out claim forms to people booked with the failed company.

Q That's not much compensation if you were expecting an October holiday. Is there much chance of finding another one at this late stage?

A There should be no problem with availability. We're in the last month of the summer season, when tour operators start selling off spare aircraft seats and hotel beds for any price they can get. Other companies have more than enough capacity for the 15,000 SunTours clients booked to travel in the next month, particularly in "troubled" areas like Kenya and Egypt.

One difficulty is that the refund, though guaranteed, will not arrive for a couple of months. So either you'll have to decide if you can afford to stump up for another holiday, or hope that your travel agent will decide to book you with a different company without paying out a second time.

The other problem affects people who had booked holidays at Christmas, when demand always exceeds supply. Capacity released by the SunTours collapse is already being snapped up by other operators; to secure your Yuletide break you must re-book now.

Q Can't something be done to reduce the depressing number of travel companies that go bust?

A Not as long as the British demand holidays at lower prices than any other country in Europe. For a typical package, German, Dutch or Scandinavian holidaymakers will pay about one-third more than those from Britain.

The UK is the bargain basement of the travel industry, and margins are squeezed so much that there is no room for error. Towards the end of its life, SunTours was offering short breaks in Istanbul for the entertainingly low price of pounds 99, well below cost. The company's clients are now benefitting from all the previous collapses in the three decades of mass-market package travel: the mechanism for rescuing holidaymakers and refunding money is now honed to perfection.

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