STA Travel collapse fuels more calls for urgent govt help

The collapse of STA Travel has fuelled more calls for the government to step up to help the industry, amid warnings many more companies are teetering on a knife edge.

STA Travel collapsed on Friday evening, days after parent company, STA Holdings, went into administration.

Consumers’ association Which? and ABTA are among those calling for urgent help.

Which? Travel Editor Rory Boland said: "The travel industry has endured a disastrous year, and many other companies will be on the brink of collapse. The government must urgently step in to provide much-needed support if this industry is to survive the next few months."  

ABTA, which has today urged the government to Save Future Travel, said STA’s collapse underlined ‘the very real pressures that travel is under at the moment’.

Business Travel Association Chief Executive Clive Wratten described the loss of STA Travel as ‘simply tragic’ and urged Transport Secretary Grant Shapps to help.

Derek Jones, CEO of Kuoni owner Der Touristik UK, asked: "How many more great businesses need to fail before the government recognises the unique challenges being faced by travel businesses and offers meaningful support?"

STA Travel, which had 52 UK locations and had been operating for nearly 50 years, ceased trading on Friday.

STA issued a statement saying: "The global impact of the coronavirus pandemic has brought the travel industry to a standstill. Over recent months, we have taken decisive measures to secure the business beyond Covid-19.

"However, sales have not picked up as anticipated due to consumer uncertainties, further restrictions and renewed lock-down measures, which are expected to largely continue into 2021.

"This week, it was announced that STA Travel’s Swiss parent company, STA Travel Holdings AG, had filed for insolvency. Today, as a result of that decision, and upon reviewing the UK business, we have been left with no choice but to cease trading with immediate effect.

"Over the coming days, we will be working through the process and how it might impact our operations."

The majority of holidays it sold were flight-inclusive packages, protected by the CAA’s ATOL scheme, as well as scheduled airline tickets under its IATA licence and as agent for the airline.

STA Travel also sold some packages which did not include flights and were protected by ABTA as well as holidays as an agent for other tour operators. 

It also booked some corporate travel, which was sold under a general agreement and there was no requirement to financially protect these sales.

ABTA said corporate customers should contact the provider of the travel service such as the airline regarding their booking.

ABTA said: "The news that STA Travel Limited, which was a long-standing ABTA member, has ceased trading will send a shockwave through the industry, bringing to life the very real pressures that travel is under at the moment.
 
"STA Travel will be a name that is familiar to most people who will have used them to travel or been aware of their name on the high street, and this distressing news will sadly affect the livelihoods of hundreds of employees.
 
"People will have used STA Travel to book package holidays as well as individual air tickets.

"The majority of holidays sold were flight inclusive packages, which are protected by ATOL and scheduled airline tickets only which should proceed as normal. Non-flight based packages will be protected by ABTA.
 
"If customers booked a package holiday through STA Travel, and the holiday is provided by another tour operator, they will need to contact the tour operator who should be able to confirm that their booking will go ahead as normal."

Rory Boland of Which? Travel added: "Most STA Travel UK customers have found it impossible to get refunds in recent months for cancelled package holidays, often for very significant sums of money. Anyone with a booking, still waiting for a refund, or those holding a refund credit note, will be able to get their money back through the CAA’s ATOL scheme. Flight-only tickets booked with STA should still be valid. Passengers should contact their airline to check."

Click here for more information and advice on STA Travel bookings.

By Lisa James, Deputy Editor (UK)