xl airlines and holidays goes bump

KAVENKOY


Joined: 10/04/2008
Posts: 1787

Message Posted:
12/09/2008 09:30

Tour firm collapse strands Britons

Last Updated: Friday, 12 September 2008, 02:16 GMT



Travel operator XL has gone into administration, grounding flightsBritish holidaymakers have been left stranded after the UK's third largest tour operator went into administration and grounded all flights.

XL Leisure Group declared bankruptcy having failed to secure a rescue package amid deep financial difficulties.

In a statement on its website, the group said it had been hit by rising fuel costs and the credit crunch. It said all its flights have been cancelled and its fleet of aircraft are now grounded.

XL Airways provides flights to more than 50 destinations across Europe, America and Africa

dusterbruce


Joined: 03/08/2007
Posts: 1125

Message Posted:
12/09/2008 10:12

85,000 people stranded abroad



200,000 advance bookings.

Tatlisu4me


Joined: 26/01/2008
Posts: 436

Message Posted:
12/09/2008 10:22

Only booked flights with them for next year last week !!

elko2



Joined: 24/07/2007
Posts: 4400

Message Posted:
12/09/2008 10:24

I think people can take out insurances for such eventualities. A little late for those involved. Very heartbreaking.

ismet

Lemtich



Joined: 15/02/2007
Posts: 1487

Message Posted:
12/09/2008 10:25

I swore I'd never use them again after my experience this year!



Glad I did.



Lem

Coachie



Joined: 29/07/2008
Posts: 2135

Message Posted:
12/09/2008 19:06

What annoys me is the fact that they were still selling holidays and flights yesterday.No body can tell me the people in charge didnt know they were going under till 2am.They must have known well before that,which to me means they should be made to repay all those people they have taken money iff in the last couple of weeks at least,and then prosecute the directors for fraud or obtaining money under false pretences

flightholiday


Joined: 19/07/2007
Posts: 3217

Message Posted:
12/09/2008 20:05

Coachie - I agree with you - not nice at all for the customers - nor for all the staff who have lost their jobs etc.



Put yourself in their shoes



Would you like to admit failure?

If the company could possibly be salvaged you would try to present a good face till the last minute so as not to lose potential sales in case I was bought out.

You need your staff to carry on and help and hopefully help with the customers when in administration so you could not tell them.

The banks may not have told them they would pull the plug till the last few hours.

dalartokat


Joined: 14/04/2008
Posts: 734

Message Posted:
12/09/2008 20:25

Coachie up until 1.00am they were trading as a business and as the CEO said, had the banks told them sooner they could have got backers, but because the banks closed them down straightaway it gave them no option.



As for ordinary staff taking bookings etc., they had no more idea than you did.

Coachie



Joined: 29/07/2008
Posts: 2135

Message Posted:
13/09/2008 12:53

I believe they were in hock to the icelandic bank for 35 million pounds.The same bank bought the French/german side of XL last year, which to me says that side of the compamy was o.k. and if the u.k.side of the company was o.k they would have bailed them or evev bought them.XL said afew months ago that they stopping ther trans atlantic runs to economise so the writing on the wall so speak was starting to appear then,hence my comment about some one new some while ago what was going to happen,especially during the economic crisis we have at the moment. Trying to refinance 35 million pounds in todays economic climate was always going to extremely difficult.

flightholiday


Joined: 19/07/2007
Posts: 3217

Message Posted:
13/09/2008 13:06

Coachie



I have heard figures far larger than that on the news.



There was a couple mentioned on the news who seemingly have lost there wedding due to the collapse of XL and he has just lost his job too, so they can't go borrowing money to salvage the non flight parts of their plans!



He worked for XL at a call centre. No doubt we will hear a lot of other bad stories in the next few days.



There will be other airlines and tour operators in trouble over the next few months if they don't charge fuel surcharges even after the full ticket has been paid for. That also could include coach travel etc.

KAVENKOY


Joined: 10/04/2008
Posts: 1787

Message Posted:
13/09/2008 13:52

There will be other airlines and tour operators in trouble over the next few months if they don't charge fuel surcharges even after the full ticket has been paid for. That also could include coach travel etc.



once the ticket has been paisd for that should be it ....yes oil has gone up and so as everything else ,but they are far more intune to their running costs than joe public .He just wants to take his holiday at a price and budget .



dont have no sympathy for some airlines as clearly they have far to many staff than they can afford ,only got to look at cta to see that .



some airlines order and pay for fuel at discounted price one year in advance ,this airline was still taking epoples monet 2 hrs before ...thats poor management and extremely bad customer service .



kav

Coachie



Joined: 29/07/2008
Posts: 2135

Message Posted:
13/09/2008 14:50

FH..I would have thought that if they had suspende d their operations until they had sorted there re- financing and nformed there staff of what they were doing would invoke a better response from there loyal staff,no doubt some would leave,but 1700 people leaving just like that would not happen because they would all apprciate that all of them were not going to get another job.Plus people understand that with mortgages etc,a wage tillyou are made redundant is better than dole money or what ever they call it these days.Hence my statement on one of the other pages I think they were in a worse state than what they saying,and were to affraid to tell there employees.

flightholiday


Joined: 19/07/2007
Posts: 3217

Message Posted:
13/09/2008 16:20

Kavenkoy

"once the ticket has been paisd for that should be it ....yes oil has gone up and so as everything else ,but they are far more intune to their running costs than joe public .He just wants to take his holiday at a price and budget . "



"Joe Public" has also forced the prices so low (as they want three holidays two cars two homes etc - with most of the world starving) that no one can build in contingencies any more and prices are in practice based on last years figures.



How much did you expect to pay for your cars fuel this time 18 months ago?

cyprusishome


Joined: 31/03/2007
Posts: 2381

Message Posted:
13/09/2008 16:25

Usually when a firm is trying to refinance they do not give any indication to the financial markets and the public. If they did this there credibility and trust collapses. Share prices go south and the firm goes bankrupt anyway.



By trying to maintain the companies operating systems they can at least try to remain viable. In this case the company backers obviously felt there was no hope and they have no option but to go into liquidation.



Over the years a number of airlines have taken this route, the most notable I can recall was Intasun, I believe in 1987. This was the biggest player in the holiday market at the time. The consequences here were far worse than XL.



Unfortunatley this sort of thing happens every day, usually on a smaller scale and with out the impact to so many people. That is the name of the game.



Personally I am surprised it has taken so long for a holiday company to go down, they are all probably in a similar position and as long as the problems continue on the world money markets there are going to be several more casualties in this group. Best advice I would offer is when booking a holiday or flight make sure you have adequate insurance and you pay with credit card.

Coachie



Joined: 29/07/2008
Posts: 2135

Message Posted:
13/09/2008 16:43

FH...Surely there has to be apoint at which you stop selling holidays at there lowest price,because if you dont stop then ,that is certain disaster. Selling holidays at below break even point sounds bad business sense to me. To blame it all on the oil price is an easy opt out,they soon hit you with oil surcharge as soon as that happens,but theyvery rarely take it off when the oil price drops.

KAVENKOY


Joined: 10/04/2008
Posts: 1787

Message Posted:
14/09/2008 07:24

Joe Public" has also forced the prices so low (as they want three holidays two cars two homes etc - with most of the world starving) that no one can build in contingencies any more and prices are in practice based on last years figures.







How much did you expect to pay for your cars fuel this time 18 months ago



message 13.



i dont understand the quote ?,are you now blaming the customer for wanting 3 holidays a year and 2 homes for the poverty in other countries ,as well as xl poor management ?



as for fuel i pay for my own fuel and claim busniess miles back at a flat rate .i drive 50k per year so it has affected me and every other car user....we have had to adapt and make cuts from other areas.....xl could have done the same (manage their way out of problem) /your in the travel industry so naturally you will defend it to some degree,im in retail and every retail outlet is suffering to extent because of higher costs , lack of consumer confidence etc .



its a global problem and profit margins have to be watched in line with costs .



i would suspect the costs at xl with big pay bosses and perks were still met several months ago when they knew they were having problems?,



dont think they have carred to think to much of their customer who just wants his holiday with his family then .



kav

fire starter


Joined: 19/06/2008
Posts: 3401

Message Posted:
14/09/2008 08:59

all those xl companies are ltd companies. when owning a ltd company you should be constantly be watching your finances. if you know you are going to fold then you should stop trading asap. if you carry on taking money knowing that you are going to fold and not be able to complete your contracts, this is fraud. my accountant drummed this into me for many years. as a ltd companies it is owned by shareholders and you probably have little redress against them, this is why you set up a ltd company in the first place. the directors are the people responsible and should be brought to book.



they took our friends money at the end of last week.

flightholiday


Joined: 19/07/2007
Posts: 3217

Message Posted:
14/09/2008 12:04

Kav,



You are in retail your products are driven by market forces you buy on the spot at current prices which can change to you on a daily basis and you change your prices to match your buying price?



The brochure price you pay was not set 18/20 months ago. The travel industry prices are set on past experience about then all the costs can rise so you allow for that and have a contingency. Could one predict that the contingency was not going to be enough?



Market forces are such that consumerism mean that most people want more for their pound so to stay competitive you aim low. The rest is I feel rather obvious.



It is not easy for anyone and I do not excuse senior management in any company when they let the customers / staff / shareholders down.

Coachie



Joined: 29/07/2008
Posts: 2135

Message Posted:
14/09/2008 15:02

Kav..I definately agree with you on your statement that it was several months ago when they first suspected problems were coming tyhere way.Whether you are in retail or holidays you have accountants to look after your finacial affairs,and if you do not listen to there advice then I think you should not be in business.Some one at the top in XL didnt heed the advice that was probably being given.

Fh....I went into one of the BIG operators a couple of weeks ago to book a holiday out of their 2009Winter Brochure, (Nov "2008--April"2009) to be told that this brochure was OUT OF DATE.It is only SEPTEMBER. When they eventually did quote me aprice over 400 pounds dearer, is what you call there "contingency figure"

KAVENKOY


Joined: 10/04/2008
Posts: 1787

Message Posted:
14/09/2008 15:37

fh



aiminig low as you say is not giving the customer what they want ,its giving the company what they want......its not all down to price as quality and value for money are major attractions.



selling lots of cheap holidays ,with lower margin and then increasing costs will end in financial disaster.



The whole travel in dustry needs to get its house in order and in tune with customer needs.



where else can you qoute prices of "flight to spain £14.95" and then pay £100 for it with add ons ?where else do you see flights for 1p and pay £50 ?.



what about walking down the high street and see holiday family of 4 florida £1500 and they dont have any to sell ?.



costs do rise i understand and i think this year has been worse than ever globally ,nobody would have seen it coming at the rate it did perhaps .





kav

flightholiday


Joined: 19/07/2007
Posts: 3217

Message Posted:
15/09/2008 00:34

Hi Coachie, Post 19



With regard to the knowledge of the XL closure - if it had been as widespread as you would suggest then all the senior management and staff would have left months ago. I am not privy to what happened with their accounts boardroom etc. and I think this is all idle speculation. My sympathy is with those who we haver tried to help over the last few days.



I have no idea of the product or prices that generat that 400 but that is not contigenvy but a price increase! A contingency figure could be a built in allowance for anticipateble extra costs. On a high margin product that could be a small sum and on a low margin item it could be a higher sum.



Kav



I am pleased to say none* of what you mention in post 20 applies to us at IAH - maybe that is why we are still a small company that is known to be honest & care. Maybe it also explains why we are still only scratching a small living 10 years down the line. * Apart from the last sentence but ask people who know us and they will tell you I have been saying this could happen for over 18 months



Tom

jackeen


Joined: 25/06/2008
Posts: 222

Message Posted:
15/09/2008 01:09

Hi Tom at flightholiday, according to the English newspapers and on the radio today, XL had financial irregularities as far back as 2006. The company, KPMG who have spoken out today are very well respected . These things dont happen overnight. As you say you have scratched a small living in the last 10 years. XL appear to have been giants in the field and maybe too greedy and not listening to KPMG so far back. Another company have gone to the wall tonight ,K & S Holidays it a matter of time in this climate before we hear of this again.

Hopefully all those people now stranded will be brought to their homes wherever that may be.

KAVENKOY


Joined: 10/04/2008
Posts: 1787

Message Posted:
15/09/2008 09:50

FH



your quite right ,ive used your company a few times and allways found the service you offer very good .You allways have gone out of your way to help and advise and offered alternatives for me .



keep up your great work



kav

Coachie



Joined: 29/07/2008
Posts: 2135

Message Posted:
15/09/2008 13:16

F.H....In answer to your post,I would like you to read msg22.This msg from jackeen backs up my statement dont you think...All the senior management and staff probably didnt know, except the ones who needed to know.All I hope is that all the people stranded abroad get home swiftly and safely,and I really do hope a thorough investigation of this companies activities will bring to light any irregularities that may have taken place.

As for your owm business I have followed posts and comments and all have been first class and Iwish you every success for the future...