We have had this problem already with Mytravel this year.. after taking advice, found there was nothing we could do.
Sounds to me like you may have been given duff advice. I was on the receiving end of a similar experience myself, took them to court, and obtained a judgement against them. If you want to pursue it, let me know and I'll try and point you in the right direction as to how to go about it.
For the benefit of anybody else who has booked a package holiday and had this happen to them and wishes to push of compensation, you have 6 years from the date of the breach/negligent event to bring proceedings against a Tour Operator, and/or Travel Agent, and/or Credit Card Issuer. (Under the Consumer Credit Act, if you paid for your holiday by credit card, the credit card issuer is jointly liable for any purchases over £100.00)
With regard to Flight only bookings, although Flight only bookings are not covered by the package Travel Regulations, other consumer protection law and general law relating to contract does still apply.
Under the Supply of Goods and Services Act 1982, If a supplier of a service breaches the conditions of a contract (for example by failing to provide a customer with a flight which they had booked and paid for) the consumer has a choice either to affirm the contract (i.e. carry on with it and accept any flight changes) and claim compensation from the trader for his failure to carry out what was agreed, or rescind (cancel) the contract. So there you go.
Liz W
