More airlines could go bust
[14th April 2008]
More airlines could go out of business as a result of the credit crunch and high fuel prices warns International Passenger Protection.
IPP claims to be the largest supplier of default and insolvency insurance to the travel industry and believes there could be further airline collapses to come. The company says that 9 airlines have already collapsed this year compared to just 5 in the whole of 2007.
“There are many factors that can put pressure on an airline’s finances and at the moment the current credit crunch and highest ever oil prices are simply reversing the hard efforts of many airlines who went back into profit after cost cutting exercises subsequent to September 11th. Unfortunately we expect several other airlines to come into the same difficulties during this difficult period,” says IPP director, Paul Mclean.
IPP has been inundated with calls from travel agents and online travel companies who have suffered losses from airlines including MaxJet, ATA, Aloha Airlines and Oasis.
Travel agents who are members of the Association of British Travel Agents are offering their customers the ABTA Protection Plan, which covers airlines going bankrupt. An increasing number of travel insurance policies are also covering airline bankruptcy now.
“We are certainly seeing a dramatic increase in requests from the travel industry to protect not only their customers but themselves with insurance covering airline bankruptcy simply because they have sadly learned the hard way by losing money on these latest airline casualties,” says Mclean.
Low fares airline Frontier Airlines is the latest airline in the US to file for bankruptcy protection after its credit card company tried to withhold card payments. The airline plans to carry on operating a full flight schedule.
Written by: Nick Purdom
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