Gatwick, Manchester and Glasgow airports were in disarray this morning, after the country's  third-largest package holiday group, XL, which flies out of those cities, went into administration. All XL flights have now been cancelled, with immediate effect, and its aircraft grounded.

The shock collapse of XL has left an estimated 85,000 people stranded abroad, according to the Civil Aviation Authority (CAA). This includes those on an XL flight bound for Gatwick from Orlando, USA, which was grounded shortly before take-off. A source at the airport said passengers were 'distressed' and accommodation was being sought.

A further 200,000 consumers will just be disappointed, having made advance bookings with the company. Customers due to fly out on holiday this weekend are being urged not to arrive at airports.

The group is the latest travel business to face financial difficulties, as - just like consumers - the industry is struggling with high fuel costs and an economic downturn.

Customers who booked with a debit card can contact their card issuer to see if they can refund their money. Those who used a credit card should be protected by section 75 of the Consumer Credit Act for purchases of over £100. Customers who booked directly through the XL website or call centres are not protected financially but should read the details of their insurance policy.

However, insurers’ terms surrounding cancellations are ‘by far the foggiest’ said James Harrison, managing director at comparison site Insurancewide. “If a flight company goes bust, it will go to receivers and that is the first port of call to reclaim the cost of your air fare. Only if this is unsuccessful can you chase the travel insurer, which is just a back up.”

The XL Leisure Group, which operates XL airlines, flew to 50 destinations, mainly in the Mediterranean. It carried 2.3 million passengers last year and had 1,700 employees globally.

CAA EMERGENCY HELPLINE

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

Be careful where you buy your travel insurance

Compare travel insurance here

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