HOWZAT

Jim McAuslan, general secretary of the British Air Line Pilots' Association, said that 1,400 of the 1,700 XL staff have already been sacked, including 220 pilots in his union.

XL staff were called to a meeting in Crawley this morning and told the company had gone into administration. “We were just in shock, hugging each other, supporting each other,” he said.

As most customers will have booked their holiday as a package, they will be covered by insurance from the Air Travel Organisers’ Licensing (ATOL).

This should pay for their flights back to Britain and hotels but many will be stuck in airports for days as they wait for seats on other airlines.

People who have booked holidays with XL for future dates should also be able to reclaim their money.

However, travellers who made bookings through the company’s website, xl.com, via XL call centres, will not qualify.

Valerie Ford, 48, who works for Sainsbury’s in Guildford was due to fly to Tenerife this morning with her husband Brian, her 22-year-old son, his fiancée and her elderly mother, who is in a wheelchair.

“We’ve got a villa booked for a week – my son who’s just turned 18 decided at the last minute to come with us. He flew out with First Choice so he’s there by himself. He hasn't been abroad on his own before.

“He’s going into the navy so this is the last holiday we’ll have with him for a while. I just want to get out there.”

Mr Ford has trawled Gatwick for alternate flights to the Canary Islands this morning but the best price available was £400 each, far more than the family can afford.

The Sunday Times revealed two weeks ago that XL was looking for a new lender after Barclays pulled financing associated with fuel-hedging positions on August 14.

A spokesman for Barclays said today that the bank is owed “less than £10 million”. It is also understood that Straumur, an Icelandic investment fund, is owed around €45 million by XL.

Landesbanki financed the management buy-out of XL in 2006 for €142 million but it is believed the lender’s debt is guaranteed by third parties.

XL said a team from Kroll had been appointed as joint administrators of the business.

“The joint administrators cannot continue trading the business and therefore all flights operated by the companies have been immediately cancelled and the aircraft grounded,” the company said in a statement.

“Going forward, the joint administrators are unlikely to be able to trade the business or operate the aircraft. All passengers who have yet to commence their travel should make alternative arrangements.”

A spokesman for Kroll, said there has been expressions of interest in parts of the business but they did not expect those expressions to lead to a “resurrection” of the company.

XL operated from Gatwick, Manchester, Glasgow, Newcastle and Birmingham. According to its last full set of financial results, it lost £24 million on a turnover of £550 million in 2007.

Holidaymakers affected by the news have been urged to call a helpline on 0800 068 8991 or 44 20 8242 4783 if calling from abroad.

For information and advice go to http://www.xl.com

For the Civil Aviation Authority, log onto http://www.caa.co.uk/

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