BUDGET Travel, which collapsed last week with the loss of more than 170 jobs, had a deficit of just €140,000.

The company, which was Ireland's largest tour operator was wound up last week after a provisional liquidator was appointed by the High Court.

The company ceased trading last week, with the loss of 172 jobs and the closure of 17 retail shops, after announcing it was unable to meet two loans amounting to €4m from Primera, its Icelandic parent company.

The company revealed that it was a row with the Commission for Aviation Regulation (CAR) which had 'undermined' Primera's confidence in Budget. The CAR refused to refund up to €4.4m which the tour operator believed it was rightfully due under its bonding arrangements.

The CAR decided to withhold the surplus of €4.4m for a period of six months.

The size of the bond relates to the forecast turnover of Budget's businesses. However, Budget forecast a vastly reduced turnover in 2010 and as a result sought a reduction in its cash bond from €11.4m to €7m.

In a statement of affairs filed by the company in the High Court, Budget said it would rack up total losses of €9.5m in the current year. The company saw turnover slump by 34pc to €101m across its tour operator and travel agency businesses.

Budget planned to cut its capacity for the coming year to less than half its 2008 level and its projected tour operating income was forecast to be just €63m in 2010 -- compared to more than €140m in 2008.

failed

However, the CAR withheld the money over concerns about the financial health of the Budget operations and the scale of the loans from Primera.

Attempts to reach a compromise failed.

The CAR directed that the Budget online booking engine be closed and no new bookings taken. It also refused Budget's operating licence application on November 16.

The company, which was established in May 1975 and had a 30pc share of the market, said that its "biggest source of difficulty" in its trading operations was "penal" flight and hotel contracts that ended at the close of October.

A total of 747 people were on holiday abroad with the tour operator at the time of its collapse.

Speaking after the company ceased trading last week, Budget Travel managing director Eileen O'Sullivan said: "This has been a painful and distressing time for us all and we deeply regret that this situation has arisen."

clairemurphy@herald.ie

- Claire Murphy