A SECOND British tour operator has folded days after XL Leisure Group was forced into liquidation.
The Civil Aviation Authority (CAA) confirmed yesterday that KS Travel - which also operates under the name Travel Turkey - had ceased trading overnight, leaving 150 passengers in Turkey seeking alternative flights home.
The London-based company primarily arranged package tours to Turkey using flights chartered through Onur Air. The CAA said all those affected by this second bankruptcy were covered by the Atol protection scheme and that it was rechartering aircraft from Onur to ensure their disruption was kept to the minimum possible.
The new blow to the travel industry, amid predictions many companies may yet fold, came as it was reported XL blocked a full investigation into its affairs two years ago after its auditor warned of "financial irregularities".
Documents filed at Companies House revealed that accountants KPMG resigned as auditors to the Excel Airways Group plc, predecessor to XL, in October 2006, citing alleged misrepresentations by directors, "material errors" in financial statements and attempts to stop "a comprehensive independent investigation".
The Sunday Telegraphquoted the warning set out in KPMG's resignation statement, saying the company's accounts did not give "a true and fair view of the profit and the state of affairs of the company". KPMG reportedly first received information about possible financial irregularities in May 2006, centred on the timing of invoices from Alpha Airports, a catering services supplier.
KPMG refused to comment, but the report said it was understood the inquiry centred on claims that XL Leisure persuaded Alpha Airports to hold back invoices until the end of the financial year, so boosting profits to October 2005. Excel Airways' parent company, Avion Group, reportedly listed on the Icelandic Stock Exchange with a valuation partly achieved on the basis of the disputed accounts.