Goldtrail ran on ridiculously tiny margins

Goldtrail should never have been allowed to trade or hold an Atol working on such tiny margins. The Caa should have kept a far closer eye on Goldtrail.

Goldtrail called in administrators Begbies Traynor on Friday – hours after paying £1.3 million to cover its flying with a “handful of airlines”.

Joint administrator Jamie Taylor said it was “unusual” for such a payment to be made just as a company was going into administration.

Tiny margins:

Goldtrail made an operating profit margin of just 0.82% during its last financial year according to accounts filed last month.

The operating profit was £445,000 for the year ending in September 2009 on sales of £54.4 million. Pre-tax profit was £452,767 in 2009 down from £495,688 the previous year.

Sales ranged from £17.2 million to £54.4 million in the past five years.

Meanwhile, Goldtrail’s collapse could cost the CAA up to £20 million to refund and repatriate the operator’s customers. The operator’s administrator Begbies Traynor is putting the likely cost to the CAA between £15 million and £20 million.

Goldtrail was not required to hold a bond as a condition of its Atol licence, and all costs will have to come out of the Air Travel Trust, which had a deficit of £31.8 million for the year ending in March 2010.