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Second holiday firm collapses days after XL

More holidaymakers face chaos after another tour operator suspended=20 operations just days after the collapse of XL sent the travel industry = into=20 turmoil.

By Nick Allen
Last Updated: 10:58PM BST 14 Sep 2008

The failure of London-based K&S Travel, which specialises in = trips to=20 Turkey, will affect about 550 people who are either on holiday already = or due to=20 depart shortly.

Most of those already abroad are in the Turkish resort of Bodrum.

The Civil Aviation Authority said it would charter an aircraft to fly = them=20 back home.

XL Leisure Group, the UK's third largest tour operator, went into=20 administration with debts of =A3143 million and grounded its 21 aircraft = on=20 Friday.

A total of 85,000 tourists were left in the United States, Europe, = North=20 Africa and the Caribbean and another 200,000 future holidays were = written=20 off.

An estimated 30,000 people will not receive a refund through the = industry's=20 Air Travel Organisers' Licence (Atol) protection scheme.

The scheme covers the cost of return flights and additional = accommodation for=20 those who made bookings through Atol-registered agents.

But those who booked directly through XL's website and call centres, = and paid=20 using a debit card, are not covered.

They may lose a total of up to =A320 million.

Louise Ellman, the Labour chairman of the Commons transport select = committee,=20 called on the government to extend the protection scheme.

She said: "In the light of what has happened the government must = think again.=20

"There is great confusion in that many tourists do not understand = whether=20 they are covered or not."

It has emerged that auditors KPMG had warned of "financial = irregularities" at=20 XL almost two years ago and claimed it was blocked from undertaking a=20 comprehensive investigation into the company.

It said information had been misrepresented by certain company = directors and=20 it was likely there were "material errors" in financial statements.

A KPMG document from October 2006, filed at Companies House, stated: = "We are=20 no longer able to conclude that the financial statements give a true and = fair=20 view of the profit of the company and its subsidiaries."

Since XL collapsed 12,000 people have been brought home on more than = 50=20 flights in a rescue airlift conducted by the CAA.

It has been forced to charter planes from companies including BA, = Virgin=20 Atlantic and Monarch, or fill spare seats on already scheduled = flights.

One of the chartered aircraft was captained by Iron Maiden front man = Bruce=20 Dickinson who is also a fully qualified Boeing 757 pilot.

The heavy metal singer flew hundreds of stranded passengers back from = Sharm=20 El Sheikh, Egypt, and the Greek island of Kos.

Virgin boss Sir Richard Branson called for special dispensation to be = given=20 in future to failed airlines so they could continue flying, under the = watch of=20 the aviation regulator, and get stranded passengers home.

Dozens of Britons staying in St Lucia were given hotel bills for = hundreds of=20 pounds each despite having already paid for their XL package holiday. =

But amid the chaos faced by holidaymakers there were reasons for some = people=20 to celebrate.

Gavin Leach, 31 and Shian Llwyarch, 29, feared they wouldn't be able = to get=20 to their =A370,000 fairytale wedding in Disney World, Flordia.

But Thomas Cook agreed to honour the bookings they had made with XL = for their=20 25-strong wedding party.

Cerebral palsy sufferer Callum Knights, six, from Lowestoft, Suffolk, = had his=20 flight to Florida to swim with dolphins cancelled but a mystery = benefactor paid=20 =A36,000 for replacement tickets.

At Dalaman airport in Turkey former XL representative Alison Hawkes, = 44,=20 continued to don her uniform and provide advice to disgruntled=20 holidaymakers.

She told stranded passengers: "I'm your ex-XL rep".

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