British travel firm goes bust, fliers stranded

updated 2:49 p.m. ET Sept. 15, 2008

LONDON - A second British vacation company has gone bust, the country's aviation regulator said Sunday, the same week the U.K.'s No. 3 tour operator collapsed.

XL Leisure Group PLC went into liquidation Friday, leaving around 50,000 of its customers stranded abroad, and the Civil Aviation Authority said it had so far managed to arrange flights home for a little less than half of them.

A second tour operator, K & S Travel, ceased trading Saturday, the authority said, affecting around 150 people in the Turkish coastal town of Bodrum.

But those customers' return trips are covered by a bond, from which the aviation authority will be able to pay for their return journeys.

"They can continue their holidays as normal," Civil Aviation Authority press officer James Hotson said, adding that about 400 people with reservations would have their vacations canceled and receive full refunds. A telephone number for K & S was dead on Sunday, and the company's Web site was down.

The aviation authority said it had so far arranged 94 repatriation flights to ferry home 22,090 XL customers left in the lurch when the company failed. It said it was focusing its efforts on returning those who were due to fly home over the weekend and predicted that most of them should be back in Britain by Monday. It said it would continue operating repatriation flights over the next two weeks to allow XL customers to complete their vacations.

British media have put the cost of the airlift at about 20 million pounds ($36 million).

Airlines and travel groups have been badly hurt by soaring fuel prices and a weakening economy. Many have trimmed their schedules, while others have gone out of business.

Two weeks ago, the Canada-based budget carrier Zoom, which offered service to Britain, shut down. Silverjet, a business-class carrier based at Luton north of London, ceased operations in June.

Alitalia, Italy's national airline, is teetering on the edge of collapse. It risks having to ground flights for lack of fuel unless a last-minute rescue plan can be arranged.

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