285,000 hit by XL collapse
12.09.08
Around 285,000 travellers have been hit after the country's third largest package holiday group went into administration this morning, with 85,000 stranded abroad. The XL Leisure Group, which operates XL airlines and sells packaged holidays under a number of brand names, flies to 50 destinations, mainly in the Mediterranean, from a dozen UK airports, became the biggest holiday operator failure for more than two decades today. All of its flights have been cancelled, d its aircraft grounded and its customers advised not to go to the airport.
The Civil Aviation Authority (CAA) said 85,000 people could be stranded abroad and 200,000 have made advance bookings with the company. David Clover, a spokesman for the CAA, said it was making arrangements to help customers of the four tour companies within the XL group. He said: ‘We're making arrangements and working very closely with the travel industry to organise repatriation flights. Clearly though, with XL Airways no longer operating, we're having to bring in substitute aircraft to bring people home.’
Mr Clover said package deals are covered by the CAA's Air Travel Organisers' Licensing (ATOL) scheme and those customers will be offered repatriation flights or their money back if they have an advance booking. However, those who booked directly with the airline or XL.com will face a fee. [It is estimated that more than 10,000 people are not ATOL protected because they booked separate flights and accommodation or flights only.] He advised those with future flights to check their insurance policies, and with their banks or credit card companies about refunds.
Administrators for XL said the decision to fold was made at a board meeting late last night, with the company burdened by £143 million worth of debt, deemed impossible to refinance. The company is the latest travel business to face financial difficulties, as the industry struggles with high fuel costs and an economic downturn. An XL pilot, who did not wish to be named, told BBC Radio 4's Today programme he was ‘completely shocked’ by the news the company had gone bust. He said he was only told in the early hours of Friday morning, and blamed the demise on the rising cost of fuel.
The XL group, which is based in Crawley, near Gatwick Airport, runs an airline and owns several travel companies, has 21 aircraft, flying mainly from bases at Gatwick, Manchester and Glasgow. It carried 2.3 million passengers last year and has 1,700 employees worldwide.
A statement on the XL group's website said: ‘The companies entered into administration having suffered as a result of volatile fuel prices, the economic downturn, and were unable to obtain further funding.’
In chaotic scenes, Sky News reports that three XL planes have been detained in Manchester Aitrport this morning because they owe the airport money. A flight from Orlando which had been due to arrive in Manchester at 09:30 - when it would have been detained - was redirected to land in Paris.
Thomson and First Choice have said they will step in to help those on ATOL protected flights or holidays. easyJet is offering to help fly passengers home, as are a number of other airlines, and Ryanair has agreed to lend the CAA a plane to help.
The XL companies were: XL Leisure Group, XL Airways UK, Excel Aviation, Explorer House, Aspire Holiday, Freedom Flights, Freedom Flights (Aviation), The Really Great Holiday Company, Medlife Hotels, Travel City Flights and Kosmar Villa Holidays.
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