Firm's collapse strands thousands

XL Leisure Group declared bankruptcy having failed to secure a rescue package amid deep financial difficulties.

The group, which had still been taking holiday bookings until recently, said all its flights had been cancelled and its fleet of aircraft grounded. It said it had been hit by rising fuel costs and the credit crunch.

Scores of disappointed XL customers queued at the firm's main airport Gatwick, one of the busiest days of the week for holiday flights. Many had no idea what had happened until they were told by airport officials.

Graham White, 27, an estate agent from London, said: "We didn't find out about it until we got here. I'm pretty annoyed."

XL customers faced a race to get tickets on alternative flights if they wanted to go ahead with their holidays, although some just turned round and headed home.

Transport Secretary Ruth Kelly said everything possible was being done to get stranded holidaymakers home.

She said in a statement: "I have been holding discussions with my officials about this situation and both they, and the Civil Aviation Authority (CAA), have been monitoring developments and putting rescue plans into action.

"The CAA have a wealth of experience in dealing with these sorts of situations and are putting systems in place to get people home, while the Government stands ready to provide the CAA with operational assistance should they need it.

"The industry has reacted well to this collapse of a major tour company and are assisting the CAA with the recovery plans to ensure that affected passengers are repatriated as soon as possible."