Boss of bankrupt budget holiday firm Low Cost Holidays warns more travel agents could collapse

Brexit, the fall in the value of the pound and fear of terrorist attacks helped scupper rescue deal for the firm, Paul Evans says

Low Cost Holidays moved its headquarters to Mallorca in 2013, meaning it was not ATOL protected (Simon Calder)

Paul Evans, chief executive of the bankrupt Low Cost Holidays group, has warned that other online travel agents could fail.

In his first interview since the collapse of his company on 15 July, he told Lucy Huxley, editor of Travel Weekly: “I don’t think this is finished yet.”

Around 150,000 British travellers were affected by the collapse of Low Cost Holidays, which happened at the start of the summer peak – a time of year when travel firms are normally "cash positive”.

Mr Evans said: “We failed at an incredibly unfortunate time and I am terribly sorry. But it’s not because of a lack of effort.

"We did everything we could but, in the end, there were things that were not in my control and we were overwhelmed.”

He said that in the past year he had talked to more than a dozen companies about buying all or part of the group, right up until the collapse.

“We were talking to one big, credible buyer until 4pm the afternoon before we ceased trading, but with everything considered in terms of trading, currency, terrorism and Brexit, they decided the risk was too big," Mr Evans said.

The firm moved its base to the Spanish island of Mallorca in 2013. At the time, Mr Evans claimed the firm was "increasing and enhancing the protection and security available to our customers who book these arrangements", but events did not bear this out.

Low Cost Holidays did not provide ATOL protection. As a result, UK holidaymakers have lost upwards of £50m. Just two per cent of those losses are covered by a bond of €1.2m (about £1m) lodged with the Balearics government.

Mr Evans' firm was accepting new bookings up until the moment of going bust.

“We were optimistic of getting a deal done, so you have to keep trading. We still believed that we could get a deal completed right up until the last moment," he said.

He denied that he had personally profited. “Anybody that knows me, knows I didn’t do this for any personal gain. I wanted to build a really great company and have devoted 12 years of my life to this, employing over 1,000 people and taking between 12 and 15 million people away on holiday. We have failed, obviously, but it’s not because we didn’t try," he said.

“In 12 years I only ever took a salary, set by the board, not by me. I once took a tiny bonus, and never a dividend.”

A rival online travel agent, On the Beach Group, issued a trading update saying it had benefited from the collapse of Low Cost Holidays.

"On the Beach has seen an immediate improvement in trading dynamics, with a higher share of market traffic, lower costs per click and improved revenue per unique visitor. The board believes that there will be a medium-term benefit to the group as consumers look to secure their holidays from recognised brands with ATOL protection," it said.

The statement also said acts of terrorism in Turkey and the south of France were affecting bookings and demand throughout the Mediterranean. On the Beach accused other travel firms of dumping capacity – selling last-minute flights and holidays at below cost, with “short-term share gains for those with distressed capacity".