Britain's third largest package holiday operator XL Leisure Group grounded all flights on Friday after going into administration, leaving tens of thousands of holidaymakers stranded. XL said its companies, which include Kosmar Villa Holidays and The Really Great Holiday Company, had been unable to obtain fresh funding to keep going after suffering from volatile fuel prices and the economic downturn. Customers arriving at airports expecting to head off to holiday destinations were hugely disappointed to find out their flights had been cancelled. Jim Duwaine from Portsmouth told the BBC he was “absolutely devastated ... we 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.” XL appointed restructuring firm Kroll as administrators but said it could not continue trading the business. “Going forward, the administrators are unlikely to be able to trade the business or operate the aircraft,” it said in a statement on its website. The failure is the latest in the sector after Spanish charter airline Futura International, which was Europe's biggest independent medium-haul charter airline, 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. British Airways Chief Executive Willie Walsh told Sky News he believes another 30 airlines could go bust in coming months. “We have seen 30 worldwide go. I would be very surprised if it is not something similar to that in the next three or four months,” he said. Britain's Civil Aviation Authority (CAA) said it was working to return home about 85,000 stranded XL holidaymakers. The CAA estimated there were 50,000 tour operator customers of XL UK abroad, plus a further 10,000 who flew with XL Airways and 25,000 with other tour operators who shared the XL flights. XL Airways, which is kit sponsor to the West Ham soccer team, had flown customers to over 50 destinations in the Caribbean, Mediterranean, Europe, North Africa and North America, predominately from London Gatwick, Manchester and Glasgow airports. It carried 2.3 million passengers last year and had 1,700 staff worldwide. Travelers who booked their holidays through one of XL's tour operators are protected under a scheme operated by the CAA in conjunction with ATOL (Air Travel Organizers Licensing), which will cover the costs involved with getting them back home. However, those who booked their flights through XL but made their own accommodation arrangements are not protected. In an interview with Reuters, Peter Long, chief executive of Europe's biggest travel firm TUI Travel Plc, called for protection to be introduced for all holidaymakers, describing the current situation as “ludicrous”. Icelandic bank Straumer Burdaras, which was one of XL's lenders, said it had agreed to acquire XL's German and French subsidiaries which it “considers to be financially viable and sustainable businesses”. They will continue to operate as separate commercial entities. Shares in TUI Travel were 6 percent higher at 234-1/4 pence at 1330 GMT while Thomas Cook was up 5 percent to 247p as investors expected them to gain from diminished competition. “We view this as good news for the tour operators given the likely 20 percent capacity reduction the UK market will now experience in 2009,” said analysts at investment bank Dresdner Kleinwort, who reiterated their “buy” recommendations on both stocks.
