THE SUDDEN collapse of one of Britain's largest tour operators has raised fears of a domino effect leading to further closures in the travel business in Ireland and internationally.
After the closure of XL Leisure Group, Irish industry sources warned it would have serious knock-on effects for the trade in Ireland.
Efforts were continuing last night to bring home hundreds of Irish holidaymakers caught in the aftermath of XL's collapse. The Commission for Aviation Regulation says it has managed to organise alternative flights to bring home holidaymakers due to fly up to next Tuesday. Efforts to repatriate travellers on flights later in the week are continuing.
The decision by XL to go into administration left 67,000 holidaymakers stranded overseas, and another 200,000 customers holding tickets they cannot use. About 1,200 customers in the Republic are among those overseas, and 3,000 were due to fly out on holidays booked with an Irish subsidiary, XL Holidays.
Most qualify for refunds and/or expenses under the bonding scheme operated by the regulator. Customers who booked flights directly from the firm are unlikely to receive compensation.
Five Irish travel firms have gone out of business this year and the closure of XL Holidays, whose packages were sold by many Irish travel agents, is expected to put further pressure on an industry suffering from high oil prices and competition.
Chief executive of British Airways Willie Walsh predicted 30 more airlines would go out of business in the next three months. He told Sky News a lot of "weak" airlines were struggling.
Aviation regulator Cathal Guiomard defended the licensing system that allowed XL Holidays to accept bookings as late as Thursday when it was known to be in financial difficulties. "While this is not a desirable situation, it is not one that lends itself to any feasible resolution. These companies are struggling to get themselves in order and matters tend to unravel rather abruptly at the last minute."
He told The Irish Times "the world had changed greatly" due to rapidly rising fuel prices since XL Holiday's licence was renewed last November.
The company yesterday issued a statement in the name of its Irish subsidiary, XL Leisure Group (Ireland) Ltd, expressing regret at the impact of the closure on customers and promising to do "everything we can to support the authorities with repatriation". According to the statement, because the Irish subsidiary was "wholly dependent" on support from its UK parent company, the directors had no alternative but to cease trading and go into liquidation. It employed 12 staff at its Capel Street office, who were said to be shocked. No one was answering calls yesterday and the website had gone down.
XL Holidays operated a single aircraft stationed at Dublin airport, with another plane based at London Gatwick also servicing Irish routes.
The firm specialised in holiday flights to Greece, and sources claimed the Irish operation was highly successful, with almost 90 per cent occupancy.
The chairman of XL Leisure Group, Phil Wyatt, said he was "totally devastated" and apologised to staff and customers after efforts to secure a multimillion pound rescue package failed on Thursday night.
The company employed 1,700 staff, and unions said they would try to secure a redundancy deal.
Ryanair said the collapse showed passengers should not book with "flaky, financially stretched airlines" such as XL. Earlier this week, Dublin-based airline Futura Gael, which offered flights to holiday destinations throughout Europe, suspended flights, blaming the cost of fuel.