6.40pm: TUI Travel Plc and Thomas Cook Group Plc, Europe's two biggest tour operators, rose in London trading as analysts said the collapse of nearest U.K. competitor XL Leisure Group Plc will benefit the industry by cutting capacity, according to Bloomberg. XL's failure will cut the supply of U.K. package vacations by about 7 percent, Investec analyst Joseph Thomas wrote in a note. Added to planned reductions in capacity by TUI Travel and Thomas Cook, the total number of package trips available may drop 20 percent in 2009, according to Dresdner Kleinwort analysts.

6.00pm: The Press Association updates today's story, affirming that 50,000 XL package holidaymakers and an additional 10,000 XL Airline passengers are still overseas tonight without means of returning to the UK. Grounded flights have also hit some 25,000 people who had booked with other tour operators but were due to use XL flights, according to CAA figures.

5.45pm: Post Office Travel Services today reassured customers it is one of the "few providers" of travel insurance where Scheduled Airline Failure (SAF) is covered as standard - covering up to £1,500 in total for each insured person.

5.20pm: Dive tour operators have been forced to find alternative air carriers for hundreds of customers flying to the Red Sea following the collapse of XL - report on The Dive magazine website

5.15pm: More on our earlier story that flight prices are today soaring. On a forum on Tripadvisor, one correspondent writes: "You will need to book new flights asap. My flight to Orlando in October has gone from £1,300 for family of four booked last month - looked today now want £3,150."

4.50pm: A Glasgow Airport spokesman said all XL flights to and from the airport had been cancelled. But he added that flights operated by the airline on behalf of travel agent Scottravel to Dalaman, Turkey, would continue to operate, with the flight now operated by airline Freebird on an altered timetable. The spokesman said extra customer service staff had been drafted in and worked through the night to help stranded holidaymakers.

4.45pm: Virgin Atlantic has said XL passengers who find themselves stuck at airports in Florida and the Caribbean will be offered special one way fares to fly home. The airline is offering flights from Orlando and Miami to London, and Orlando to Manchester, for £349 to anyone with proof of having flown out with XL.

The deal also covers flights to Gatwick from Barbados, Antigua, St Lucia, Grenada, Tobago and Jamaica, as well as flights from St Lucia and Barbados to Manchester. “Our priority is to help passengers who are overseas over the next two to three weeks,” a spokesman said. “We have already seen hundreds of people turning up to our ticket desks and ringing us."

4.35pm: Atol spokesman David Clover said the XL collapse was a “huge failure” and urged holidaymakers to be patient. “With XL Airways no longer operating we are having to bring in substitute aircraft to bring people home,” he said. “We ask people to be patient while we organise that... bear with us, this is a huge failure.

“Our priority is the stranded passengers abroad and getting them back to the UK. Clearly if people do incur some additional costs, if they are delayed in their return, then they can put a claim in to the Civil Aviation Authority under the ATOL scheme.”

4.05pm: Bmi has joined BA, Flybe and easyJet in offering special repatriation fares to passengers stranded abroad with XL flight bookings. The fares apply to UK bound flights from Florida, the Caribbean, Israel, Jordan, Turkey and Egypt and the offier is valid for travel between 13 and 30 September. The airline is offering bmi’s current "better for business" sale return fares - call 0870 6070 555 or +44 (0)1332 648181 if dialling from outside the UK.

3.30pm: "I have clients in Cyprus with XL so hopefully I can organise and get them home. The strange thing is that they phoned me on the outward journey last week, asking if the rumors that XL were going bust was correct. I replied “No of course not, the UK 3rd largest holiday company - if they go bust we are all in trouble!” From the Travelrants blog

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