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More airline failures forecast amid credit crunch
A warning of further airline collapses came today in the wake of nine failures so far this year compared to five in the whole of 2007.
Default and insolvency insurance supplier International Passenger Protection says it has been inundated with calls from travel agents and online travel companies who have suffered losses from the failure of carriers like MAXjet, ATA, Aloha Airlines and Oasis Airlines Hong Kong, where reports indicate around 30,000 passengers are out of pocket.
Denver-based Frontier Airlines filed for Chapter 11 bankrutpcy protection last week but operations are continuing.
IPP director Paul Mclean said: “There are many factors that can put pressure on an airlines 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 costing cutting exercises subsequent to September 11th.
“Unfortunately we expect several other airlines to come into the same difficulties during this difficult period.â€
He added: “We are certainly seeing a dramatic increase in requests from 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.
“The oil and credit crunch factors highlight the increasing reasons that cause bankruptcy in airline market and of course we should not ignore the other sectors of the travel industry that are also under great pressure.â€
by Phil Davies
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