300,000 hit by collapse of holiday giant XL

In a shattering blow for the travel industry, XL Leisure Group called in the administrators in the early hours after rescue talks broke down.

The failure of the country's third biggest tour operator leaves almost 100,000 tourists stranded without f lights, mainly in America, the Caribbean and Mediterranean.

The Civil Aviation Authority and rival airlines were today organising the industry's largest ever "air-lift" to get them home.

As many as 200,000 other customers have now been left with worthless tickets to travel with XL, shirt sponsor of West Ham United.

The company was still taking bookings up to it going into administration at 3am but was forced to ground its airline ahead of the first departures this morning.

Many passengers only found out when they arrived at airport check-in desks. On seeing the closed signs at Gatwick, Bromley teacher Sandy Dennis, 36, burst into tears having saved for her Florida holiday for a year. Those who booked package holidays with XL's four tour operators should get their money back under the industry's bonding protection arrangements, but many others who booked direct with XL Group will lose everything.

The spectacular demise of XL makes it the biggest failure in the history of the UK package industry. ILG went down in 1991 with 23,000 passengers overseas, while Courtline went bust in 1974 leaving nearly 50,000 customers stranded.

A leaflet handed to XL customers told those already on holidays in destinations such as St Kitts and Tobago that they will have to pay for their flights home if they have booked with XL Airways through XL.com or XL call centres.

Alternatively, arrangements will be made for their flights and they will be charged when they return.

Those who booked through other tour operators may be eligible for a flight home. Honeymooner Kelly Belcher, 32, from Southend, who was travelling with husband Mark, said at Gatwick: "The first we knew about it was when we got to the check-in desk and ever since then we've been passed from pillar to post."

Speaking at a press conference today Phil Wyatt, chief executive and controlling shareholder of XL, broke down in tears and said he was "totally devastated".

He said: "It's with great regret we've had to take this decision. We've made every effort to find extra funding. It's a very sad day for me and I am totally devastated, as are my staff, many of whom have been with us for many years. I want to apologise to passengers who had to check in this morning. I genuinely apologise."

He said XL had around 90,000 passengers abroad at the time of the administration. Around 67,000 had booked their holidays through XL operators. Another 23,000 are booked on XL flights through other operators. Mr Wyatt blamed rising fuel prices and shipping company Eimskip, who called in a ¤207 (£165) million debt on Wednesday.

He said: "This company should never have gone belly up, but it has."

Alistair Beveridge, a partner at administrators firm Kroll admitted there would be "significant redundancies" at the 1,700 strong XL firm.

Staff were told of the company's financial situation at a 9.15am meeting following weeks of speculation.

Last year the XL Group carried 2.3 million passengers to 50 destinations. Rival airlines British Airways and Ryanair offered to help bring stranded XL holidaymakers home.

BA chief executive Willie Walsh predicted that another 30 airlines would go out of business in the next three to four months.

Q&A

Can holidaymakers get home if they are on an XL package holiday?

Yes, but they might have to wait. The Civil Aviation Authority is arranging transport home for everyone who booked a holiday package with XL at no cost. They will also make sure hotel accommodation is covered until the flights are in place, which may take a few days because of the vast number of people affected.

What happens now for those who only booked a flight with XL?

The CAA is arranging to fly all XL passengers home but people who only had flights will get billed, and have to cover their own extra accommodation costs. Travellers can try to make their own arrangements if they want to - but they will have to pay.

Those who booked on a credit card will get a refund, depending on the credit card company's exact terms and conditions. But those who paid on a debit card will get nothing.

Is travel insurance any use?

Very unlikely. The Association of British Insurers says very few travel policies cover the collapse of the airline or holiday operator.

What if I have booked a holiday or a flight?

Your holiday is cancelled and you should speak to your travel agent about a refund. If you booked a flight you are not entitled to a refund and should pursue your credit card company. If you used a debit card, you have lost the flight and the money.