XL Leisure Group Goes Under

We'd love to be able to bring you lots of good news on the blog, but unfortunately it's in fairly short supply at the moment. The price of oil is coming down, our inflation rate seems to be steadying and interest rates have at least stopped rising. Apart from that it is doom and gloom all the way.

XL Leisure Group, best known in Ireland for their low cost airline arm, XL Airways, has declared itself bankrupt. In a notice on its website this morning, www.xl.com, the company states:

"XL Leisure Group Plc, XL Airways UK Limited, Excel Aviation Limited, Explorer House Limited, Aspire Holidays Limited, Freedom Flights Limited, Freedom Flights (Aviation) Limited, The Really Great Holiday Company plc, Medlife Hotels Limited, Travel City Flights Limited, Kosmar Villa Holidays plc – All in Administration (the Companies)."

It continues: "On 12 September 2008, Alastair Beveridge, Nick Cropper, Simon Appell and Stuart Mackellar were appointed as Joint Administrators of the Companies by the Court. The Companies entered into Administration having suffered as a result of volatile fuel prices, the economic downturn, and were unable to obtain further funding. The Joint Administrators cannot continue trading the business and therefore all flights operated by the Companies have been immediately cancelled and the aircraft grounded. Going forward, the Joint Administrators are unlikely to be able to trade the business or operate the aircraft.

The notice concludes: "All passengers who have yet to commence their travel should make alternative arrangements as detailed on the website."

Customers currently abroad with Cruise City, Excel Holidays, The Florida Skytrain, Transatlantic Vacations, Travel City Direct, Travel City International, Kosmar Holidays, Freedom Flights or Aspire Holidays are all ATOL protected but will have to contact their holiday representative to find out what alternative arrangements for return travel and interim accommodation have been arranged. Those who have booked holidays with any of these companies but have yet to travel can claim a refund through their travel agent.

Those who booked online, or through a call centre, with XL Airlines have lost their money as the company is not ATOL protected. If you are currently abroad you will have to arrange and pay for return flights without compensation. The same goes for those who booked holidays with Medlife Hotels, it is not ATOL protected and no refunds are available.

For information from the Commission for Aviation Regulation, including claim forms for those affected by the collapse of the group, click here.

The full story is available on our own website here.

According to the Sunday Business Post, XL Leisure was the UK's third-largest tour operator after First Choice and Thomas Cook, so the effect of the collapse on the UK industry will obviously be huge.

The news will come as a heavy blow to the Irish travel business as XL was one of the rising stars of the industry. Any drops in capacity make the market less competitive and, in the longer term, will most likely lead to a rise in the cost of travelling and holidaying abroad. It is also a huge blow to airports like Knock which were serviced by the airline.

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