An XL Disaster

Most people are aware that the XL Leisure Group have gone into liquidation, but what does it mean to you?

Firstly, the background. Although more details will emerge in the coming days and weeks, it seems that the XL group have been victim to the rising price in fuel. With debts of in the region of £140million, the banks were not prepared to re-finance. Against a backdrop of economic gloom and in a climate where their fuel bill was expected to increase by £40million this year, there was no way out. The company cannot trade their way through, the majority of the 1,700 staff will lose their jobs and an estimated 200,000 people will lose their holidays. The liquidators are looking to sell the parts of the business that have any value, but there is unlikely to be much return for the creditors.

Who is affected?

XL Leisure Group had various guises, including:

• The Really Great Holiday Company
• Cruise City
• Excel Holidays
• The Florida Skytrain
• Transatlantic Vacations
• Travel City Direct
• Travel City International
• Kosmar Holidays
• Freedom Flights
• Aspire Holidays
• XL Airways
• Medlife

If you booked your holiday with one of these, you will be affected and will need to consider you options.

What can I do?

If you booked your holiday as part of a package (usually where you have booked flights and accommodation together) you are likely to be covered by the ATOL guarantee. One of the big advantages of buying a package holiday is that the holiday company either has to hold a bond or equivalent to the combined value of the holidays until the holiday has finished. That way, there is always enough money available for when situations like this occur. Sadly, that does not apply to flights, accommodation or other elements booked direct.

If you think you were on a package, you should log onto the ATOL website www.atol.org.uk where you will find details of how to claim from the fund. Hopefully, you will be able to recover your money.

Alternatively, if you used a credit card you should be able to get a refund through your credit card provider pursuant to section 75 of the Consumer Credit Act 1974. Contact your card provider direct to claim. If you paid by debit card, your bank may be able to help stop the transaction and you should contact them immediately. Finally, you may be able to claim on your travel insurance policy, it is worth considering the policy terms and conditions.

If none of the above is applicable and you're unable to get a refund elsewhere, you should write to the administrators at:

Kroll Limited, Wellington Plaza, 31 Wellington Street, Leeds LS1 4DL and they will add your name to the long list of creditors. If there is any money in the pot when the assets have been sold, you may be entitled to a share proportionate to your loss?

Sadly, XL are not the first travel company to suffer and it has been predicted that many of the smaller companies, especially those with airlines, will struggle through these hard times. The advice is to use a credit card to pay for all services and if possible book an ATOL protected package. That way, even if they fail, you should be able to get your money back.

Nolan Mortimer is Partner at colemans-ctts Solicitors and head of the Travel and Tourism Department. If you have been affected by issues in this article or have any other travel and tourism related legal needs, contact Nolan on 0208 296 6825 or e-mail at Nolan.Mortimer@colemans-ctts.co.uk.