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Second holiday firm collapses days after XL

More holidaymakers face chaos after another tour operator suspended
operations just days after the collapse of XL sent the travel industry into
turmoil.

By Nick Allen
Last Updated: 10:58PM BST 14 Sep 2008

The failure of London-based K&S Travel, which specialises in trips to
Turkey, will affect about 550 people who are either on holiday already or due to
depart shortly.

Most of those already abroad are in the Turkish resort of Bodrum.

The Civil Aviation Authority said it would charter an aircraft to fly them
back home.

XL Leisure Group, the UK's third largest tour operator, went into
administration with debts of £143 million and grounded its 21 aircraft on
Friday.

A total of 85,000 tourists were left in the United States, Europe, North
Africa and the Caribbean and another 200,000 future holidays were written
off.

An estimated 30,000 people will not receive a refund through the industry's
Air Travel Organisers' Licence (Atol) protection scheme.

The scheme covers the cost of return flights and additional accommodation for
those who made bookings through Atol-registered agents.

But those who booked directly through XL's website and call centres, and paid
using a debit card, are not covered.

They may lose a total of up to £20 million.

Louise Ellman, the Labour chairman of the Commons transport select committee,
called on the government to extend the protection scheme.

She said: "In the light of what has happened the government must think again.

"There is great confusion in that many tourists do not understand whether
they are covered or not."

It has emerged that auditors KPMG had warned of "financial irregularities" at
XL almost two years ago and claimed it was blocked from undertaking a
comprehensive investigation into the company.

It said information had been misrepresented by certain company directors and
it was likely there were "material errors" in financial statements.

A KPMG document from October 2006, filed at Companies House, stated: "We are
no longer able to conclude that the financial statements give a true and fair
view of the profit of the company and its subsidiaries."

Since XL collapsed 12,000 people have been brought home on more than 50
flights in a rescue airlift conducted by the CAA.

It has been forced to charter planes from companies including BA, Virgin
Atlantic and Monarch, or fill spare seats on already scheduled flights.

One of the chartered aircraft was captained by Iron Maiden front man Bruce
Dickinson who is also a fully qualified Boeing 757 pilot.

The heavy metal singer flew hundreds of stranded passengers back from Sharm
El Sheikh, Egypt, and the Greek island of Kos.

Virgin boss Sir Richard Branson called for special dispensation to be given
in future to failed airlines so they could continue flying, under the watch of
the aviation regulator, and get stranded passengers home.

Dozens of Britons staying in St Lucia were given hotel bills for hundreds of
pounds each despite having already paid for their XL package holiday.

But amid the chaos faced by holidaymakers there were reasons for some people
to celebrate.

Gavin Leach, 31 and Shian Llwyarch, 29, feared they wouldn't be able to get
to their £70,000 fairytale wedding in Disney World, Flordia.

But Thomas Cook agreed to honour the bookings they had made with XL for their
25-strong wedding party.

Cerebral palsy sufferer Callum Knights, six, from Lowestoft, Suffolk, had his
flight to Florida to swim with dolphins cancelled but a mystery benefactor paid
£6,000 for replacement tickets.

At Dalaman airport in Turkey former XL representative Alison Hawkes, 44,
continued to don her uniform and provide advice to disgruntled
holidaymakers.

She told stranded passengers: "I'm your ex-XL rep".

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