Thousands of British summer holiday plans in ruins after villa specialist Air Parade goes bust

Firm, whose main trading arm is Villa Parade, said it had 'ceased trading with immediate effect'

Up to 10,000 British travellers have had their holiday plans scuppered following the collapse of a Yorkshire-based villa specialist. Air Parade Ltd of Huddersfield went bust on Wednesday night after weeks of speculation about its future.

The company, a member of Abta, posted a message on its website saying it had “ceased trading with immediate effect”.

The firm’s main trading brand was Villa Parade. It sold villa holidays around the Mediterranean, particularly on the Spanish island of Mallorca, and in Florida. Abta, the travel association, believes that the company has 2,000 forward bookings. Since each booking is typically for a family or larger group, it is possible that 10,000 UK holidaymakers are faced with finding short-notice alternatives for the summer - even though they had paid months in advance.

Concerns about the company were raised last month by customers of Villa Parade who had booked accommodation in Mallorca. A rival firm, Travelopo, emailed them to say that the owners of the properties had not been paid by Villa Parade; as a result, the email asserted, the bookings were not valid. Travelopo offered to re-book accommodation, but at a higher price.

Last week Villa Parade won an injunction at the High Court forcing Travelopo to retract its allegations. Travelopo was thrown out of Abta last month, due to what the association called its failure to meet the “financial requirements of membership”.

In the weeks leading up to the collapse of Villa Parade, repeated enquiries from The Independent about the company’s financial state failed to get a response.

Right up until the failure, the firm was assuring customers and the travel trade that the rumours were unfounded. In a message to customers, the managing director, Ian Sheekey, said: “Villa Parade has been trading for over 15 years and has a strong financial base … Rest assured we will be doing our best to ensure you have a fantastic holiday with us in 2014.”

Despite the reassurances, anxious holidaymakers with Villa Parade bookings continued to contact The Independent. One said: “We have a villa booked through them for Moraira in August and out of interest contacted the agent for the owner as our final balance is due. They confirmed they have cancelled their contract with Villa Parade as they have not been paid for any of their holidays and were re-advertising their villas.”

About one in five of the Villa Parade customers had bought packages comprising flights and accommodation from the company. They should be able to obtain refunds from the Civil Aviation Authority under the ATOL scheme. The CAA says it is “working closely with the failed company”.

The majority of customers bought their own flights separately, obliging them to search for scarce accommodation as the main summer season gets under way. They will be able to claim back the money paid to Villa Parade through an Abta bond; the association’s Consumer Helpline is 020-3117 0599, and applications are available through Abta's “Travel Clinic” at abta.com. But Abta protection does not cover flights when these have been bought separately, usually direct from the airline.

A spokeswoman for Abta said that refunds should be processed "within days or weeks". Past experience suggests refunds from the CAA could take several months. Meanwhile prices for alternative accommodation are increasing sharply.

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