What to do if you've been affected by the XL collapse

Tour operator and budget airline XL went into administration on 12 Sept 2008. This is a full guide to your rights.

All flights and holidays have been cancelled, yet there are possible techniques you can take to minimise your potential loss depending on how you booked and paid for your holiday.

This means insolvency practitioners have been called in to run each company and get what cash they can for the creditors via selling or utilising the assets. In theory, a business can be kept running as a ‘going concern’ but this is unlikely.

Most likely the insolvency practitioners will simply collect in the assets and try to sell what they can, and then distribute whatever cash remains to creditors. When the money is distributed there’s a priority of who gets any cash, which usually works a bit like this:

• The Insolvency Practitioners (if they didn’t get paid they wouldn’t do the job in the first place)
• Any secured creditors (if they’ve borrowed money that's secured on property/assets)
• Any employees (redundancy pay)
• Everyone else ranked equally (this includes customers, the Inland Revenue etc. and all will be ranked pro-rata)

What does this means in practice?

It means, to be within any chance of getting money back you’ll have to apply to the administrator for it, not XL. Any money left after paying the secured creditors and employees will then be split between everyone else that has submitted a claim.

Unfortunately there's only a small chance you’ll get any money back by doing this. If you do it won't be very much and it will take some time to be resolved but don't worry; there are more options to get your money back.

The XL administrator is...

Kroll Limited,
Wellington Plaza,
31 Wellington Street,
Leeds
LS1 4DL
or contact it on 0800 068 8991

Unfortunately most travel insurance policies WON'T cover this situation, unless of course you specifically requested it and the provider agreed to include it; but this is a rarity.

Yet, it is worth giving your policy provider a call to double check exactly where you stand with it. Some polices that do cover scheduled airline failure are mentioned in my Cheap Travel Insurance guide.


1. Did you book with a travel agent?

If you purchased flights as part of a package with a travel agent that is ATOL protected (this is a financial protection scheme tour operators can sign up to), contact them asap to organise alternative travel arrangements. You should be totally covered

Use the ATOL search facility to check if your travel agent's ATOL protected.

2. Did you book with an XL group tour operator?

The following XL travel agents are ATOL protected so if you booked with them contact ATOL directly for help. It will help you to make alternative arrangements.

• The Really Great Holiday Company PLC - ATOL 3827
  Trading as: Cruise City, Excel Holidays, The Florida Skytrain, Transatlantic Vacations, Travel City Direct and Travel City International
• Kosmar Villa Holidays PLC - ATOL 1760
  Trading as: Kosmar Holidays
• Freedom Flights Limited - ATOL 5296
  Trading as: Freedom Flights
• Aspire Holidays Limited - ATOL 6536
  Trading as: Aspire Holidays

3. Did you book directly?

If you booked your holiday through XL.com, the XL call centre, or one of the companies below, unfortunately you are not ATOL protected so you’re not entitled to a replacement holiday or your money back.

In this case, any help will depend on how you paid for your holiday. See Step 2 below for the options.

None ATOL protected companies in the XL group:

XL Leisure Group Plc, XL Airways UK Limited, Excel Aviation Limited, Explorer House Limited, Freedom Flights (Aviation) Limited, Medlife Hotels Limited, Travel City Flights Limited.


1. Was your flight or holiday over £100 & did you pay for any or all of it on a credit card?

Thankfully the majority of people, if not all, would have paid over £100 for their flight or holiday, and if the cost was charged to a credit card, either wholly or partly, the credit card company is equally liable under Section 75 of the Consumer Credit Act.

This means that whatever rights you'd have with a retailer/company, you have with the credit card company also. So here, you have a claim for breach of contract as it's a non-supply of service.

This is a legal protection that credit card companies have no choice about, as when you spend on a credit card, you're effectively entering into an arrangement to borrow (even if you pay off in full) so you get these rights.

How to get your money back

Call up the credit card company and tell it you want to make a claim and specifically state you're doing this under “section 75 of the Consumer Credit Act”, though be aware the call centre operative mightn't have a clue what you're talking about.

While hopefully it will be smooth process, as the credit card company should already be aware of the insolvency, there is a chance it'll say you have to contact the company first or claim from it. This is not true.

The law states it is jointly responsible, there is no 'first point of call', you are choosing to claim from it and that is an acceptable decision. If it wants to try and claim from the company in administration, then that's its business.

Be firm but polite and request a claim form. Again, on the claim form state it is a claim under "section 75 of the Consumer Credit Act".

2. Did you pay on a Visa Debit or Credit Card?

If you paid on a Visa credit card for something over £100, then use section 75 above as that is legal protection and is a legal right.

Yet if you paid on a Visa debit card for any amount, or in the unlikely event you paid under £100 on a credit card, then you have a reasonable chance to get your cash back via the Visa Debit Chargeback system.

Unlike with credit cards, Chargeback isn't a legal protection, but a protection from Visa's own rules. It's effectively Visa's own refunds system. It's designed so that if you pay for something and that order/service hasn't been adequately completed or is never received, or the order is illegitimate in some way, your bank can do a chargeback from the bank that collected the payment.

The crucial part of this is that the chargeback means you're asking for a refund from XL’s payment processing bank rather than XL itself, which is great news, as XL has no cash, but its bank does!

Importantly, your bank must request a chargeback within 120 days of you realising the contract won't be completed (not from the date of the transaction), but don't even think of leaving it that long; get the wheels in motion straight away.

How to do chargeback

Quite simply call up your bank, with all the details of the payments made to XL (check your statements, if you don't have them, ask the bank for details, but this will slow things down) and ask it to “start the Chargeback procedure” to get you your money back on the basis of "non-delivery of the goods".

At this point it's quite possible the person you're talking to will never have heard of Chargeback. Yet don't let that put you off; this is a legitimate system, and you need to (politely) stand your ground. If the bank says no, write an official letter of complaint and note that you'll be writing to complain to Visa.

Luckily, the more people who try to do a Chargeback, the more likely it is the banks will know the process and proceed.

3. Did you pay with another debit cards?

Banks and building societies are not legally obliged to help but sometimes they do; this happened almost across the board with the Farepak problems.

If you paid via another type of debit card, you could have a go at asking for something similar to Chargeback, but the rules are different and nowhere near as strong. Please click reply to report this if you have any success, so others can benefit.

4. Did you pay by cash or cheque?

Unfortunately, you don’t have any legal protection so aren’t covered. Here your best route is to apply to the administrator for a refund, but be prepared that it’s not likely to yield much, maybe 10% back if we're being optomistic.

The administrator is Kroll Limited, Wellington Plaza, 31 Wellington Street, Leeds LS1 4DL or contact it on 0800 068 8991 for more information.


Unfortunately many people will have already travelled out to their destination but have no means organised of getting home.

If you’re ATOL protected

If you bought from an ATOL protected company you should be able to stay in your hotel or villa and complete your holiday. In most cases, your accommodation provider will be paid direct by the ATOL scheme, which is administered by the Civil Aviation Authority (CAA), so you will not incur any additional expenses.

The CAA will also arrange a flight to bring you home. You can contact the CAA on 0044 2891 856 547 if you have any questions or check for details on the CAA website.

If you need to make any payments for items like hotels or transfers, you should obtain a receipt as far as possible and the CAA will consider claims for refunds when you get back.

If you’re not ATOL protected

The Civil Aviation Authority (CAA) will arrange for you to come home but you will be charged for this when you get back. More details on this are on the ATOL website.

You can also arrange your own travel, so ensure you read the Cheap Flights guide to find the least costly alternative. It’s best to pay by credit card and make sure you keep a copy of all your costs. Read the Claiming back extra costs section below.

Slightly different procedures are in place for bookings with Medlife Holidays. See the XL website for details.


The Financial Ombudsman Service has said there's a slim chance of getting a refund of the extra you're paying on top, under section 75, if you're stranded and have to pay more than your original fare to get back.

However, this will only be applied on a case by case basis and will depend on your circumstances. The best thing to do is keep a record of all your transactions and travel plans and present your case once you've returned.

If this doesn’t work send details of the extra costs to the Administrator: Kroll Limited, Wellington Plaza, 31 Wellington Street, Leeds LS1 4DL or contact it on 0800 068 8991 for more information.


This site, and especially the forum was one of those at the centre of the campaign to get people's money back in Oct '06's Farepak crisis, and only several weeks ago with Wrapit and Zoom airlines and may of the above techniques are tried and tested because of Farepak.

If you have time it's worth reading through some of the Farepack discussion to see some of the success stories of Farepack victims and how to coordinate your complaint.

Please report back your experiences below to help others in the same situation.

How to keep updated on the XL situation

Any further info, changes or successes about XL money back will go in the free weekly MoneySaving e-mail.

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