Bankruptcies over the festive season predicted by ProtectMyHoliday
ProtectMyHoliday predict bankruptcies over the festive season
ProtectMyHoliday, the worlds leading direct sell travel failure specialist, is warning travellers to be cautious with their festive travel this Christmas as the travel industry continues to be hit with large losses.
IATA (International Air Transport Association), recently predicted the airline industry will make a cumulative loss of €11 billion this year, a steep increase from the anticipated €9 billion estimated earlier in the year. The full impact of these losses is yet to be felt despite over 60 airlines failing over the last 12 months.
For airlines the festive period is important on two counts:
1) Traditionally Airlines sell huge volume of tickets over this period and will have budgeted accordingly. If these fail to materialise then this compounds losses from a slow summer-time.
2) The Summer-time results have been realised and airlines can assess if mid-term strategies to reverse last year's poor results are working. If not the forecast trade deficit will allow evaluation of what action needs to be taken, if any options are left.
Examples of the variance of strategic success come from two extremes of the aviation industry, Ryanair and British Airways who both posted losses in 2009.
In July, BA posted its worst-ever financial performance with a £401m loss resulting in a massive cost cutting exercise which could shortly result in industrial action by staff. Despite these cuts analysts are predicting further losses of up to £250m at first-half results to be posted on Friday.
On the other hand, Ryanair's profits ballooned by 80 per cent in the first half of 2009-2010, and passenger numbers are rising so fast that the low-cost carrier expects to pip British Airways to the UK's number one spot this winter. Despite this Ryanair acknowledge the profit is mainly due to a drop in oil prices and are preparing for a rough ride over the next six months.
Over the last two Christmas's a number of airlines collapsed and IPP are expecting a similar impact this year, with the knock on effect to other parts of the travel industry being severe, as those linked to all areas of travel are affected.
ProtectMyHoliday Sales and Marketing Manager, Michael Ward, explained the effect of the governments ATOL (Air Travel Organisers Licence) scheme administrated by the Civil Aviation Authority. ‘We predict well over half of travellers leaving the UK will be without financial protection over the festive period. People are visiting friends and relatives and not booking accommodation or other component parts of their trip which means no protection under the government scheme.'
‘Fares also increase over this period and people seem oblivious to the risk they are taking. Travellers see logos for ATOL, ABTA and IATA and assume they are safe, however if you are independently booking this is not the case ‘, warned Ward.
Travel companies are also taking advantage of an affiliate scheme through ProtectMyHoliday and warning their customers about the gap in consumer protection.
To ensure you are protected this period please follow the following steps:
1. Air Travel Organisers Licence - If a trip is ATOL protected the holiday company being booked with must either hold an ATOL or be an agent of a company that does, in which case it must tell the customer when they book which ATOL they are protected by, and as soon as money is exchanged, issue an ATOL Receipt to the customer.
2. Check your travel insurance policy. Quality policies are now including cover for Financial Protection under sections like Scheduled Airline Failure (airline only) and End Supplier Failure (airline plus all other suppliers, e.g. hotels, car hire, etc).
3. Take a dedicated policy from an on-line protection website such as ProtectMyHoliday.com. With no excess, this tailor made policy will capture the details of the airline and other suppliers of the trip and produce a unique policy on-line in minutes.
ProtectMyHoliday.com is a trading name of International Passenger Protection Limited (IPP) formed in 1990.
IPP is the largest and main supplier of Scheduled Airline Failure Insurance (SAFI) and cover for other parts of the holiday in the UK and world-wide operating in over 30 countries.
IPP operates as an underwriting agency on behalf of insurers and re-insurers who's combined net worth exceeds Euro 100 Billion
September 2010: easyJet becomes first Low Cost Carrier to protect passengers
October 2009: Insurers already have it covered - Holiday Protection
Protect your holiday - Financial Failure Travel Insurance from as little as £5 per person
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