The Civil Aviation Authority is today assessing the legal implications of Lowcostholidays’ decision to move its head office to Spain.
The CAA said Lowcostholidays acted "unacceptably" by giving very short notice of the move and did not provide clear information about the impact it would have on its customers’ protection.
A CAA spokesman said: "We are looking at it in more detail today. We were given such short notice of the move that we have not had enough time to form a definitive legal view.
"We don’t feel that Lowcostholidays gave enough time to us or to its customers.
"The company has said people will be protected under the Spanish system. What we don’t know is whether that’s possible and what the level of protection is.
"We are looking at what this means to consumers and who is providing the protection for them."
On Friday, the CAA said that, although Lowcostholidays has been contacting its customers with forward bookings, offering them the option of cancelling and receiving a full refund or continuing with their booking under the new arrangements, their letter was "lengthy and unclear".
It also complained that customers were only given seven days, until Friday November 8, to decide, which was "not sufficient time".
Lowcostholidays CEO Paul Evans defended the company’s actions, saying: "We’ve done everything absolutely properly" and said customers have nothing to worry about.
"We have taken the best tax advice, the best regulatory advice, we have changed all of our websites, we have all the correct Spanish licences in place and our customers are covered under the EC package travel directive. They’ve got nothing to be worried about," he said.
He added the move to Spain was a natural one for the company, which now operates in 47 countries.
"I’m married to a Spanish women and we live in Spain, and we have been there for four years. Lowcostholidays has been operating from Spain and now employs over 100 staff in our Palma office."
