UPDATE 2: Air Malta takes over XL services to Malta

(Adds MTA reaction)

Air Malta has agreed to help a group of some 180 clients of Britain's XL Group - the third biggest UK tour operator - which collapsed this morning.

A spokesman for the Malta Tourism Authority said that following the collapse of the XL Leisure Group, the Authority made the necessary inquiries to determine the extent to which this development would influence the Maltese tourism industry.

To date, XL operated one weekly charter flight to Malta from Newcastle, which weekly charter flight was meant to be discontinued during the winter months. The Newcastle charter, however, was not operated by XL as a tour operator in its own right, but chartered by other tour operators, including Thomas Cook, Thomson and First Choice, amongst others. When contacted by the MTA, the tour operators chartering the weekly Newcastle flight all stated that they were looking into all other possible alternatives, including chartering other aircraft, in order to bring their clients to Malta.

"We understand that the service is now going to be provided by Air Malta," the MTA said.

The XL group announced this morning that it had grounded all flights, leaving tens of thousands of holidaymakers stranded in many countries.

XL said its companies had been unable to obtain fresh funding to keep going after suffering from volatile fuel prices and the economic downturn.

Air Malta in a statement said the collapse of XL Aviation, with which it had a charter agreement, had not affected any of the Maltese airline’s operations.

It also confirmed that it had received payments with respect to all flights effected on XL’s behalf to date.

"An XL weekly operated charter flight Newcastle – Malta – Newcastle will now be operated by an Air Malta aircraft at the planned schedule. Air Malta will continue to operate this flight every Tuesday until the end of the planned charter series up to the 28th October 2008. This means that there are no passengers stranded in Malta, and tourist arrivals will not be affected negatively."

The XL failure was the latest in the sector after Spanish charter airline Futura International, which was Europe's biggest independent medium-haul charter airline, also filed for administration earlier this week.

Zoom Airlines, a discount transatlantic carrier with staff in Britain and Canada, cancelled all flights last month and began bankruptcy proceedings, also stranding passengers.