Saturday, September 13, 2008

Another Airlines Bites the Dust as the UK Tries to Get Thousands Home

The UK aviation watchdog is coordinating a massive airlift with airlines and tour operators today after the XL collapse left at least 85,000 holidaymakers stranded abroad in the US, the Caribbean and Europe.

The Civil Aviation Authority is chartering planes from airlines, lease companies and tour companies after Britain's third-largest tour operator entered administration, leaving a further 200,000 people with holiday bookings that are now worthless.

The boss of Europe's largest tour operator, TUI Travel, urged the government to impose a £1 rescue levy on all airline tickets after it emerged that 10,000 of the stranded holidaymakers will not receive compensation or a replacement flight home because they are not covered by the tour industry compensation scheme.

Around 75,000 XL customers will be flown home by the CAA, airlines and tour operators because they are protected by ATOL, a fund that all UK holiday companies are required to pay into. However, the 10,000 people who booked flights through XL's charter subsidiary XL Airlines must pay for their flight home, as Virgin Atlantic warned that any customers stranded in Florida or the Caribbean who are not covered by ATOL face several days of delays because flights are fully booked.

"These customers probably thought they were protected and that is ridiculous. There will be more airline failures because they cannot cope with this pressure," said Peter Long, TUI Travel chief executive. Long added that the ATOL scheme was designed to cope with an XL-scale collapse but would be severely depleted. "It will have to be rebuilt," he said.

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