News & Current Affairs

September 13, 2008

Thousands stranded by XL collapse

Thousands stranded by XL collapse

The collapse of the UK’s third largest package holiday group has left tens of thousands of Britons stranded abroad.

The decision to place XL Leisure Group into administration has also left thousands of staff facing the axe.

Chairman Phil Wyatt said he was “totally devastated” by the failure which has grounded XL’s 21 planes. The company flies to about 50 destinations.

There are 67,000 stranded who booked directly with XL, and another 23,000 who booked via other companies.

The Civil Aviation Authority(CAA) also said the firm had 200,000 advance bookings.

‘Sad day’

CAA EMERGENCY HELPLINE
Customers abroad: +44 (0) 2891 856547
Customers in the UK with advance bookings: 0870 5900927

“We’ve made every effort, myself and my fellow directors, to find new funding for the business – and it’s a very sad day for me personally. I am totally devastated,” XL chairman Phil Wyatt said.David Clover, a spokesman for the CAA, said it was making arrangements to help customers of the four tour companies within the XL group.

“In respect of people who are currently abroad we’re making arrangements and working very closely with the travel industry to organize repatriation flights.

“Clearly though, with XL Airways no longer operating, we’re having to bring in substitute aircraft to bring people home.”

He said package deals are covered by the CAA’s Air Travel Organizers’ Licensing (Atol) scheme and those customers will be offered repatriation flights or their money back if they have an advance booking.

Struggling

However, those who booked directly with the airline or XL.com – who are in the minority according to the CAA – will face a fee.

Anyone yet to take their flights should check their insurance policies, and with their banks or credit card companies about refunds, he added.

XL – which carried 2.3 million passengers last year – is the latest travel business to face financial difficulties, as the industry struggles with high fuel costs and an economic downturn.

But an agreement has been reached whereby Straumur investment bank has acquired XL’s German and French subsidiaries, which Straumur considers to be financially viable and sustainable businesses.

They will continue operations as separate commercial entities.

Share prices in holiday firms TUI Travel and Thomas Cook were up 6% and 7% following the collapse of their rival.

Economic downturn

“As the travel industry matures in Europe, there was always going to be pressure on those operating in the mid-market,” said Lastminute.com chief executive Ian McCaig.

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.”

XL COMPANIES
XL Leisure Group
XL Airways UK
Excel Aviation
Explorer House
Aspire Holidays
Freedom Flights
Freedom Flights (Aviation)
The Really Great Holiday Company
Medlife Hotels
Travel City Flights
Kosmar Villa Holidays

BBC travel correspondent Tom Symonds added that the industry would be facing an “enormous challenge” as it deals with the fall out of XL’s collapse.

“XL wasn’t just an airline it was a fundamental link Britain’s package holiday industry,” he said.

“Getting these people to and from their holidays will be an enormous challenge not least because of the shortage of aircraft caused by so many airline collapses in recent weeks.

“XL can’t use its own airliners for among other reasons it has no insurance now.”

The CAA said it was working with the travel industry to bring stranded holidaymakers home, and denied it had been responsible for the grounding of XL’s planes.

Airlines BA, Easyjet, BMI, Flybe and Ryanair have offered to fly some of the stranded passengers home.

Easyjet chief executive Andy Harrison told that its fuel efficient planes had helped it cope with the high cost of aviation fuel although on Thursday it said it would cut up to 60 jobs to remain competitive.

Fuel pressures

Mr Wyatt added that spiralling oil prices had increased the firm’s costs “year-on-year by over $80m”.

“So where many people have been making hay with high oil prices, this is the repercussions of that hay – 1,700 people potentially out of work today in the UK,” he said.

Rival TUI warned that rising fuel costs meant that “airlines with less than robust business models” – such as XL and Futura – were now failing.

It added that the government should take steps to ensure all holiday companies must belong to the Atol scheme, which offers package holiday makers financial protection.

In the US, one flight from Orlando to Manchester managed to set off, while one bound for Gatwick was grounded. A source at the airport said accommodation was being found for the “distressed” passengers.

In the UK, air traffic control prevented three XL aircraft from taking off from Manchester Airport.

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.

‘Going nowhere’

The company flies mainly from bases at Gatwick, Manchester and Glasgow airports.

Travel writer Simon Calder warned that many thousands of XL customers hoping to fly to the Caribbean, Mediterranean, North Africa and North America, from airports across the UK in coming weeks and days “simply won’t be going anywhere”.

Jim Duwaine, from Portsmouth, said he was given the news when he arrived at Gatwick where he had been due to catch an early morning flight to Menorca.

HELP OFFERED TO XL CUSTOMERS
Flybe – offering flights for 90 euros (£71.50)
BA– offering a one-way discount
Easyjet– flights offered for £75
BMI – provided aircraft to CAA for transport people home
Ryanair – has offered spare plane to CAA for transport

He said: “Absolutely devastated. Got up at midnight planning on going on holiday, but got let down, unfortunately. We’re here, just trying to get some other flights, but it’s not looking good. I think everyone else has got the same idea.”

Other holidaymakers have said they have been quoted vastly inflated prices for replacement flights.

Robert Spurgeon, of Norwich – an XL customer who had been due to fly to Tenerife from Gatwick – said: “We’ve not been told anything but my wife’s been quoted £2,000 for alternative flights.”

Also among those affected are a 130-strong choir on tour to Canada from Wales who were booked on Zoom and lost £50,000 when it folded last month, and then re-booked with XL.

XL is the current kit sponsor of West Ham United but football club said it would end the sponsorship deal and play on Saturday in an unbranded kit.


Are you struggling to make your way home from your holiday destination? Have you paid for a holiday that you may not be able to take? If you were an employee of XL what are your views? Send us your comments
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September 8, 2008

Scientology ‘faces French trial’

Scientology ‘faces French trial’

Church of Scientology headquarters in Paris

France keeps Scientology sites under surveillance

The Church of Scientology in France will be tried in court for “organized fraud”, according to legal sources.

The lawyer for one of the plaintiffs behind the case told that if convicted the controversial Church could be banned.

The Church has faced stiff opposition in France as well as Germany, where it has been declared unconstitutional.

The French branch of the Church of Scientology said it had been cleared of “numerous” similar charges.

It said such charges should not be brought to court again.

This case stems from claims by a woman who said she was approached by Scientologists in a Paris street in 1998 and offered a free personality test.

She says she ended up handing over more than 20,000 euros (£16,000) for courses, books, illegally prescribed drugs and an “electrometer” supposed to measure fluctuations in her mental state.

Olivier Morice, a lawyer for the woman and for one other plaintiff in the case, says the case could be brought before the court by the end of the year or in early 2009.

‘Commercial operation’

Scientology was founded in the United States in the 1950s by science-fiction writer L Ron Hubbard.

It has attracted stars such as Tom Cruise, John Travolta and the late Isaac Hayes.

But it been accused in some countries of cult-like practices and exploiting its followers financially.

Scientologists reject this and say that they promote a religion based on the understanding of the human spirit.

France refuses to recognise Scientology as a religion, categorising it as a purely commercial operation and keeping it under surveillance.

In Germany last year, federal and state interior ministers declared the Church of Scientology unconstitutional, and in France in 2000 a government committee recommended dissolving the Church.

However, in October a Spanish court ruled that the Church of Scientology of Spain should be re-entered into the country’s register of officially recognised religions.

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