IPP warns of further airline collapses
Monday, April 14, 2008
International Passenger Protection (IPP), supplier of default and insolvency insurance to the travel industry warned of further airline collapses after 9 airlines have already collapsed in the first 4 months of 2008 compared to 5 in the whole of 2007.
IPP’s 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 whom 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.”
Paul Mclean went onto say that they have been inundated with calls from travel agents and online travel companies who have suffered losses from not only carriers like MaxJet, ATA and Aloha Airlines but more so from Oasis Airlines Hong Kong flying between London Hong Kong and Vancouver where reports indicate around 30,000 passengers are out of pocket. Luckily ABTA travel agents are offering their customers the benefit of the ABTA Protection Plan to cover Airline bankruptcy plus of course any other end supplier of the travel itinerary. There are also an increasing number of Travel Insurance policies that are also now covering airline bankruptcy.
“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”
News reports state that Frontier Airlines filed for Chapter 11 bankruptcy late Thursday. Frontier blamed the action on an "unexpected attempt by its principal credit card processor to substantially increase a 'holdback' of customer receipts, which threatened to severely impact the airline's liquidity."
Source : http://www.traveldailynews.com
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