Saturday, 13 September 2008

XL suspends all flights

Amidst recent concerns that airlines are in for a tough time due to rising fuel costs and the economic downturn, the news broke yesterday that XL, the UK’s third largest tour operator, has collapsed, leaving some 85,000 holidaymakers stranded and waiting for alternative flights, and around 10,000 passengers having to find their own way home. The company flies to about 50 destinations.

XL Leisure Group had to call in the administrators in the early hours of yesterday morning, as last minute talks with financial backers were not successful. The fleet of planes were grounded, and XL Chief Executive Phil Wyatt said he was “totally devastated” by the collapse, in an announcement that showed him close to tears.

Most of the stranded holidaymakers are in the US, the Caribbean and Europe, but the Civil Aviation Authority is chartering planes to get them home, because they are protected by ATOL, a fund that all UK tour operators are obliged to pay into.

There has now been pressure from the tour industry that the government impose a £1 rescue levy on all airline tickets, because 10,000 of the holidaymakers will not receive any compensation or alternative flight home, as they are not covered by the industry compensation scheme. They are not covered because they do not actually have a holiday package, and booked flights only with XL’s charter subsidiary XL Airlines.

Not only is there concern about those who are currently stranded, but also for the 200,000 who had bookings to fly with XL, and staff who now face job losses.

It certainly seems to be turbulent times for the air industry.

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