but as a ticketing agent, where was his ATOL?
He probably didn't require one.
Who needs an ATOL?
An Air Travel Organiser's Licence (ATOL) is required by law when a firm sells:
* flight-based packages;
* charter flights;
* scheduled flights where an airline ticket is not issued straight away:
Travel agents selling flight-based packages and flights as an agent for ATOL holders do not require their own ATOL, providing that these sales are documented correctly.
Apply for an ATOL | ATOL Trade Information | ATOL
If Varsity Airlines issued flight tickets on the scheduled flights operated by
Linksair immediately on application (which as the only ticket seller, it would be able to), then it was in effect operating as a direct agent for the airline - and tickets bought from an airline are not required to be covered by an ATOL.