XL airlines collapses - Does your travel insurance policy cover you?

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XL Leisure Group, owner of XL Airways and 4 holiday companies trading under 9 different names was forced into administration late last night, blaming their insurmountable £143m debt on the current economic conditions and high fuel prices.

The collapse of XL Leisure Group follows the closure of budget long haul airline Zoom last month, and a further 4 other budget long haul carriers have gone into administration this year. During April 4 US airlines went bust in one week alone.

Customers who booked their holiday or flight through a travel agent with ATOL protection may be entitled to compensation. However, it's estimated that 10,000 of the 285,000 customers affected by the closure booked directly with XL, either online or over the phone. These people will not receive any financial help from the Air Travel Organiser's Licenses (ATOL) scheme or from XL.

There is light at the end of the tunnel for customers who booked their travel insurance through one of the few providers offering cover for financial failure of travel and accommodation providers. Credit card providers may also be able to help out with compensation for those who used their credit card to book their flight or holiday.

It seems that tour operators and airlines are finding it increasingly difficult to operate in the current economic climate. The credit crunch makes it harder for companies who have racked up debts from recent high oil prices to stump up cash to save themselves. This means that although oil prices have fallen, many more companies, and therefore travellers, may be at risk. Therefore, it is more important now than ever to ensure you have a travel insurance policy that will cover you for these type of events.

The Travel Insurance Guide provides comprehensive information about providers allowing you to select a policy which will cover financial failure of airlines, accommodation and even pre-booked activities. Check our provider pages to choose between 70 top travel insurance providers, with information on levels of cover and events that are covered under each policy.

Some of the main Travel Insurance providers who offer this type of cover are, Karma Travel Insurance (company now closed Jan 2013), Insurefor.com Travel Insurance, Swinton , Saga, and the Post Office. For a full list make sure you look at our specialist Financial Failure Cover section.


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#1 Additional information about the XL Leisure group failure, here: http://travel-insurance-insider.blogspot.com/2008/09/xl-leisure-in-administration.html
Posted by Richard Hobbs on 17/09/2008 at 12:33
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