29th August 2008

(Aldershot, UK) As high fuel prices and the economic downturn claim another victim in the leisure industry, travelinsuranceguide.org.uk warns travellers of the dangers of booking directly with holiday companies.

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.

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 XL, and are reliant solely on their travel insurance policies.

However, very few travel insurance policies cover accommodation or airline foreclosure. In the event of a foreclosure most travellers are covered by the ATOL scheme, or by their credit card company, but this still exposes a large number of travellers to the risk of misery and financial loss.

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.

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.

"Booking flights and accommodation directly with tour operators online or over the phone has become very popular, and may seem like a great way to save money. But unless you get a comprehensive travel insurance policy which covers accommodation and airline foreclosure then you run the risk of being stranded abroad or having your trip cancelled with no way of getting your money back. The temptation is to book the cheapest travel insurance, but the number of companies who have gone bust this year shows you simply cannot afford to scrimp on a travel insurance policy."

"With oil prices widely expected to spike again it's likely to get even more difficult for travel companies to stay afloat. There are travel insurance policies which cover airline insolvency but they are few and far between. Although comparing prices online can net you great deals, you may find that when you really need help your policy won't cover you. That's why we rate providers on best price and best cover."

~ Brendan McLoughlin, Founder, travelinsuranceguide.org.uk

Notes to editors

travelinsuranceguide.org.uk is the only free, impartial comparison travel insurance website. The site compares 1680 policies from the 70 top insurance providers to find the cheapest and best cover.

Please refer to the site in copy as 'travelinsuranceguide.org.uk' in copy, and link to us in online articles.

travelinsuranceguide.org.uk is one of 100 money-saving websites from Fubra. Check out our other popular sites - www.PetrolPrices.com,www.OurProperty.co.uk and www.HousePriceCrash.co.uk.

----

Louise Doherty

Spokesperson
travelinsurance.org.uk

e: louise@travelinsuranceguide.org.uk
w: www.travelinsuranceguide.org.uk
p: 01252 367208
m: 07525264999