In the UK, the third largest UK holiday packager has gone bust. In Italy, Alitalia is close to bankruptcy. Up to 85,000 are stranded away from home. Let’s take a look at both stories. Note the following link has changed overnight so if you click on it a different story will show.

The BBC is reporting Holiday firm XL in administration

Tens of thousands of Britons are stranded abroad after the country’s third largest package holiday group went into administration.

The XL Leisure Group, which operates XL airlines, flies to 50 destinations, mainly in the Mediterranean.

All its flights have now been cancelled and its aircraft grounded.

The Civil Aviation Authority (CAA) said 85,000 people could be stranded abroad and 200,000 have made advance bookings with the company.

A statement on the XL group’s website said: “The companies entered into administration having suffered as a result of volatile fuel prices, the economic downturn, and were unable to obtain further funding.”

Rival holiday firm TUI warned that rising fuel costs meant that “airlines with less than robust business models” – such as XL and Futura – were now failing.

Thousands stranded by XL collapse

The BBC is reporting Thousands stranded by XL collapse .

The collapse of the UK’s third largest package holiday group has left tens of thousands of Britons stranded abroad.

The decision to place XL Leisure Group into administration has also left thousands of staff facing the axe.

Chairman Phil Wyatt said he was “totally devastated” by the failure which has grounded XL’s 21 planes. The company flies to about 50 destinations.

There are 67,000 stranded who booked directly with XL, and another 23,000 who booked via other companies. The Civil Aviation Authority(CAA) also said the firm had 200,000 advance bookings.

“We’ve made every effort, myself and my fellow directors, to find new funding for the business – and it’s a very sad day for me personally. I am totally devastated,” XL chairman Phil Wyatt said.

BBC travel correspondent Tom Symonds added that the industry would be facing an “enormous challenge” as it deals with the fall out of XL’s collapse.

“XL wasn’t just an airline it was a fundamental link Britain’s package holiday industry,” he said.

“Getting these people to and from their holidays will be an enormous challenge not least because of the shortage of aircraft caused by so many airline collapses in recent weeks.

“XL can’t use its own airliners for among other reasons it has no insurance now.”

Alitalia Closer to Bankruptcy

Bloomberg is reporting Alitalia Talks Stall, Pushing Airline Closer to Bankruptcy.

Alitalia SpA moved closer to bankruptcy as Roberto Colaninno’s investor group abandoned talks to buy the state-owned carrier because of union opposition.

“The situation is worrisome and getting worse,” Labor Minister Maurizio Sacconi said in Rome today after the negotiations broke down. “Alitalia won’t be able to operate much longer if there aren’t new developments.”

Italy has been trying to sell its stake in Alitalia, which lost more than $3 million a day in the first half, for more than two years. Union opposition scuttled an offer from Air France- KLM Group in April, the same month Silvio Berlusconi was elected prime minister after pledging to organize an Italian bid that now may be unraveling.

The Colaninno-led bid proposed 3,250 job cuts and the sale of unprofitable assets including the airline’s cargo and maintenance businesses. The offer links wages to productivity gains and would leave many Alitalia workers earning less, labor leaders said. The government had given unions a deadline of yesterday to reach an agreement, saying Alitalia would run out of cash this month and be bankrupt without an accord.

“After seven days of meetings, there aren’t conditions to continue negotiations,” Colaninno’s Compagnia Aerea Italiana said in an e-mailed statement. The unions “don’t seem to realize what a dramatic situation Alitalia is in,” CAI said, adding that it hasn’t formally withdrawn its offer.

Alitalia has nine main unions that have failed to forge a common position on the plan, prompting separate negotiations with the different labor groups. The sticking point is proposed salary reductions for the workers who would remain in the reorganized company rather than the number of job cuts, union officials said.

“We want an agreement to rescue the company,” said Luigi Angeletti, national secretary of the UIL union. “We know that there will be job cuts and workers will be asked to do more, but we don’t see any reason why we should accept a cut in salary as well.”

The airline industry is in trouble as are its workers. Coming up next, a look at the Boeing strike.

Mike “Mish” Shedlock
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