100 lose jobs as cruise firm reaches end of the line

Tens of of thousands of holidaymakers who booked through one of Britain's leading cruise specialists learnt last night that the firm has ceased trading.

Gill's Cruise Centre was thrown out of Abta, the travel association, amid rumours that it has accrued debts of more than £10m.

The Cardiff-based firm suspended sales on Thursday, after several cruise lines stopped accepting bookings via the agency. Up to 100 staff are thought to have lost their jobs. The business model at Gill's involved deep discounts combined with heavy press advertising.

The company operated a call centre in the West End of London. While cruise lines were paying commission of 15 per cent or more, the company appeared to be thriving. But earlier this year, Britain's biggest cruise firm, Carnival – which owns P&O and Cunard – cut its commission to just 5 per cent.

In March, the firm closed its London call centre, blaming the commission cuts and the poor economic outlook. One rival agent said yesterday: "They were discounting to unsustainable levels. Customers would ask us to 'price-match' the deal Gill's were offering. When we saw the price, it was clear they were selling loss leaders."

Some staff remained at work yesterday to deal with existing customers' calls, but from 5pm onwards none of the company's numbers was being answered. Victoria Bacon, head of communications for Abta, said: "We are treating Gill's Cruise Centre as a financial failure and as such have withdrawn their Abta membership."

Unlike some other high-profile travel failures, the collapse is unlikely to disrupt holidaymakers' plans, or cost them money. The cruise lines are planning to honour bookings, even if they have not received all the money paid by customers to Gill's.

* One of Britain's smaller airlines announced yesterday it will close down earlier than planned. Air Southwest, based at Plymouth airport, said it will end its operations in September. A statement on its website said: "Forward bookings are significantly lower than required and the level of demand is not financially viable."