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News Code : TTime- 177699        Print Date :
Saturday, September 13, 2008

Thousands stranded by XL
collapse

The collapse of the UK's third largest package holiday
group has left tens of thousands of Britons stranded abroad.

The decision to place XL Leisure Group into
administration has also left thousands of staff facing the axe.

Chairman Phil Wyatt said he was “totally devastated” by the
failure which has grounded XL's 21 planes. The company flies to about 50
destinations.

There are 67,000 stranded who booked directly with
XL, and another 23,000 who booked via other companies.

The Civil
Aviation Authority(CAA) also said the firm had 200,000 advance bookings.

“We've made every effort, myself and my fellow directors, to find
new funding for the business -- and it's a very sad day for me personally.
I am totally devastated,” XL chairman Phil Wyatt said.

The CAA
said it was working with the travel industry to bring stranded
holidaymakers home, and denied it had been responsible for the grounding
of XL's planes.

Airlines BA, Easyjet, BMI, Flybe and Ryanair have
offered to fly some of the stranded passengers home.

David Clover,
a spokesman for the CAA, said it was making arrangements to help customers
of the four tour companies within the XL group.

“In respect of
people who are currently abroad 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.”

He 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 - who are in the minority
according to the CAA -- will face a fee.

Anyone yet to take their
flights should check their insurance policies, and with their banks or
credit card companies about refunds, he added.

XL is the latest
travel business to face financial difficulties, as the industry struggles
with high fuel costs and an economic downturn.

However an
agreement has been reached whereby Straumur investment bank has acquired
XL's German and French subsidiaries, which Straumur considers to be
financially viable and sustainable businesses.

They will continue
operations as separate commercial entities.

Share prices in
holiday firms TUI Travel and Thomas Cook were up 6% and 7% following the
collapse of their rival.

Economic downturn

“As the travel
industry matures in Europe, there was always going to be pressure on those
operating in the mid-market,” said Lastminute.com chief executive Ian
McCaig.

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.”

Mr. Wyatt added that spiralling oil prices had increased the
firm's costs “year-on-year by over $80m”.

“So where many people
have been making hay with high oil prices, this is the repercussions of
that hay - 1,700 people potentially out of work today in the UK,” he said.

Rival TUI warned that rising fuel costs meant that “airlines with
less than robust business models” -- such as XL and Futura -- were now
failing.

It added that the government should take steps to ensure
all holiday companies must belong to the Atol scheme, which offers package
holiday makers financial protection.

'Going nowhere'

In
the U.S., one flight from Orlando to Manchester managed to set off, while
one bound forn Gatwick was grounded. A source at the airport said
accommodation was being found for the “distressed” passengers.

In
the UK, air traffic control prevented three XL aircraft from taking off
from Manchester Airport.

The XL group, which is based in Crawley,
West Sussex, runs an airline and owns several travel companies, including
Travel City Direct, Medlife Hotels Limited, The Really Great Holiday
Company, Freedom Flights and Kosmar Holidays.

The company flies
mainly from bases at Gatwick, Manchester and Glasgow airports.

Travel writer Simon Calder warned that many thousands of XL
customers hoping to fly to the Caribbean, Mediterranean, North Africa and
North America, from airports across the UK in coming weeks and days
“simply won't be going anywhere”.

Jim Duwaine, from Portsmouth,
said he was given the news when he arrived at Gatwick where he had been
due to catch an early morning flight to Menorca.

He said:
“Absolutely devastated. Got up at midnight planning on going on holiday,
but got let down, unfortunately. We're here, just trying to get some other
flights, but it's not looking good. I think everyone else has got the same
idea.”

Other holidaymakers have said they have been quoted vastly
inflated prices for replacement flights.

Robert Spurgeon, of
Norwich -- an XL customer who had been due to fly to Tenerife from Gatwick
-- said: “We've not been told anything but my wife's been quoted £2,000
for alternative flights.”

Also among those affected are a
130-strong choir on tour to Canada from Wales who were booked on Zoom and
lost £50,000 when it folded last month, and then re-booked with XL.

(Source: BBC)

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