A COMPANY planning to operate tour packages to Lapland and Dubai from early next month has appealed against the aviation regulator's refusal to renew its tour operator's licence on grounds of allegedly inadequate financial arrangements and resources to meet its actual and potential obligations.
The proceedings by Manorcastle Ltd, of Clonkeen Road, Deansgrange, Dublin, trading as United Travel, against the Commission for Aviation Regulation were admitted to the Commercial Court yesterday by Mr Justice Peter Kelly and the case will be heard later this month.
Manorcastle wants to operate flights to Lapland and Dubai from early December and both sides agree the matter is urgent, the judge was told.
The case arises after the regulator refused on October 24th last to grant Manorcastle a licence, under the Transport (Tour Operators and Travel Agents) Act 1982 to carry on business as a tour operator from November 1st, 2008, to October 31st, 2009.
The regulator refused the licence on the basis of its view the company's financial business and organisational resources and any financial arrangements by it were inadequate to meet its actual and potential obligations relating to its tour operating activities.
Under the 1982 Act, all tour operators are required to put in place a bond with the regulator, either as a cash lodgement or an insurance/bank guarantee of an amount equal to 10 per cent of the operator's annual projected licensable turnover for the period of the licence.
Manorcastle is trading on a cash lodgement bond of €243,000 based on a project turnover for the licence period of €2.2 million. Its projected receipts for flights to Lapland for the three months from October 2008 are €943,000 while the projected receipts from sales of flights to Dubai are €343,000.
In an affidavit, Manorcastle managing director Con Murphy said he has been engaged in the travel business in Ireland as a travel agent and tour operator for the past 25 years, during which time neither he nor any company under his control ever had its licence varied or revoked.
Mr Murphy said he had informed the commission that the turnover for the first six months of the period between November 2007 and October 2008 was in excess of projections on all fronts. There were some 900 bookings for Lapland flights and he was confident that the 1,200 seats required to break even would be achieved as bookings for Lapland tended to be made closer to Christmas.
He said he had pioneered tours to Lapland over Christmas some 21 years ago and, based upon current bookings and his experience, he was confident this season's tours would be successful and profitable. Oil prices had halved and this had alleviated pressure on airlines.
Mr Murphy said he had also agreed to make a cash injection of €100,000 into the company to ameliorate any potential cash flow difficulties.
He did not accept the company was ever in a position where it did not have the financial resources to pay its debts as they fell due, he added.
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