Holiday giant XL in administration

THOUSANDS of people could find themselves stranded abroad after the UK’s third largest package holiday group went into administration this morning.

XL Leisure Group, which operates XL airlines, flies to 50 destinations, mainly in the Mediterranean, from bases at Manchester, Gatwick and Glasgow airports.

All its flights have now been cancelled and its aircraft grounded.

In a statement on its website, the group said it had been hit by rising fuel costs and the credit crunch.

Passengers yet to travel should make alternative arrangements, while those already on holiday will be brought home on flights arranged by the Civil Aviation Authority, the statement said.

The Civil Aviation Authority (CAA) said 85,000 people could be stranded abroad and 200,000 have made advance bookings with the company.

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 group, which carried 2.3 million passengers last year, 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.”

David Clover, a spokesman for the CAA, said: “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.”

It remains unclear what effect the administration will have on West Ham United, the Premiership football club which has a £2.5m shirt sponsorship deal with XL Leisure.

XL underwent a management buyout in 2006, and quickly grew to become a big player in the UK holiday market, behind the two dominant firms TUI Travel and Thomas Cook

The collapse of XL comes after Spanish airline Futura suspended its business earlier this week, which was blamed for Macclesfield-based Seguro Travel and its subsidiary Seguro Aviation going into administration.

Futura’s collapse has hit flights out of Liverpool John Lennon Airport where a flight from Lanzarote was cancelled and deptures are due today to Tenerife and Menorca and Alicante and Majorca tomorrow.

Futura said most of the passengers had already been relocated with other operators.