Air Malta steps in to help clients of bankrupt XL

The 180 XL Leisure Group passengers who are in Malta will be flown back home by Air Malta after the UK-based holiday package provider went into administration yesterday morning.

XL has grounded all its flights and called off bookings, leaving thousands of holidaymakers high and dry.

Air Malta said it had a three-year agreement with XL that came into force in October 2005. The Maltese carrier also said it has received all payments with respect to flights on XL's behalf to date.

Air Malta said it operated a number of flights on behalf of XL from the UK to various destinations such as the Canary Islands, Spanish Mediterranean resorts, the Greek islands, Cyprus, Red Sea resorts, Turkey and a number of skiing destinations.

In view of XL declaring bankruptcy, Air Malta said it is in close contact with the UK Civil Aviation Authority (CAA), which is coordinating repatriation efforts of all XL clients stranded in various destinations. The Maltese airline said it will be assisting the CAA.

XL, the UK's third largest package holiday provider, used to operate a weekly charter flight to and from Malta from Newcastle (XLA5249 and XLA5248), which was discontinued during the winter months. Air Malta said tourist arrivals will not be affected negatively by the collapse because it will continue to offer the weekly Tuesday service, planned to run until October 28. An airline spokesman said the tour operator involved will be paying Air Malta directly for these flights.

Civil aviation industry sources said the XL flights to Malta were always almost full and regular.

Tour operators Thomas Cook, Thomson and First Choice are looking into alternatives for bringing their clients to Malta.

XL said its companies had suffered financial hardships from volatile fuel prices, the economic downturn and it also found itself unable to obtain further funding. The company registered a staggering £24 million loss, leading it to declare bankruptcy and go into administration.

The collapse, claimed by the CAA to be probably the biggest in the industry in the last 20 years, is estimated to have hit at least 285,000 people: 50,000 are estimated to be abroad, having booked a flight through an XL operator, 10,000 of these were on holiday with XL and 25,000 with other operators who shared the XL flights. The airlift logistics, aimed at repatriating the 67,000 passengers who were intending to return to the UK on an XL flight, is being coordinated by the CAA, which "will have a huge challenge on their hands", according to XL chief executive officer Phil Wyatt.

The CAA said travellers who had booked package holidays through The Really Great Holiday Company, Kosmar Holidays, Freedom Flight, and Aspire Holidays are protected under the Air Travel Organiser's Licences (ATOL) scheme. Those so protected will be able to enjoy their holiday if they are already abroad and a flight will be arranged to repatriate them, the CAA said. However, the CAA said, it is estimated that more than 10,000 people are not protected as they booked separate flights and accommodation or flights only, meaning that, while the CAA would be able to make arrangements for stranded holidaymakers to return home, the travellers would not be eligible to refunds.

Thomson and First Choice have stated that they will step in to assist those on ATOL protected flights or holidays. British Airways too said it is willing to provide one-way fares to stranded travellers, effectively offering their flights for chartering by the CAA, it said.

The administrators appointed to XL are Alastair Beveridge, Nick Cropper, Simon Appell, and Stuart Mackellar. XL said that "the joint administrators cannot continue trading the business and therefore all flights operated by the companies have been immediately cancelled and the aircraft grounded. Going forward, the joint administrators are unlikely to be able to trade the business or operate the aircraft".

Earlier this week, Spanish charter airline Futura International, Europe's biggest independent medium-haul charter airline, suspended its fleet of 38 Boeing 737s for a day as it also filed for administration.

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