XL Leisure Group has cut 500 jobs in the past two months, one in four of the total, but its chairman insists it will go into the new year in good health.

Jobs have gone across the business, mainly at the Crawley headquarters and among airline crew and support staff.

Chairman Peter Owen ­declined to give details, but said the statutory consultation ended on November 23. He conceded 2007 had been a tough year.

“There have been some hard times for us and we have been aggressive in terms of cost. We have shed 500 staff out of 2,000 over six weeks. It has been horrible,” said Owen.

The group has cut total capacity for 2008 by 20%, he said. Its seat-only operator Freedom Flights has already announced a 10% cut in flying next summer.

Owen refuted suggestions the group risks losing money on its deal with Libra Holidays, which converted a £2.4 million debt into a 20% stake in the operator.

“Libra is a major customer so we were interested in the outcome. We look to continue getting Libra’s business.”

The debt has been converted into a loan. He added: “We are confident we will get our money back.”

Libra will reduce its flying by up to two-thirds next year, but in Owen’s words: “We’d rather the company prospers and we get paid. It has not left a hole for us.”

He declined to give details of continuing talks between XL and Greek specialist Argo Holidays but insisted the group is in good shape.

“There will not be a repeat of the cuts next year. We have a £2 bn business and have reduced our cost base significantly. We will be as able as anyone to cope with the economic situation.”

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