'Be prepared for more airline failures'

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'Be prepared for more airline failures'

Thursday, September 03, 2009

The travel industry must brace itself for more airline failures in the next 12 months, according the managing director of an independent travel management company in the South of England.

Bath Business Travel boss Adam White was speaking to guests at his company’s annual Travel Industry Briefing, held in Poole.

He said that over capacity in the skies would inevitably lead to more bankruptcies, so the industry not to be surprised if a major carrier goes under.

“There are thousands of empty seats flying round the world at the moment,” he said.

“The imbalance between supply and demands prevails even though there has already been a number of failures and some consolidation.”

Over-capacity was being exacerbated by airlines’ contractual obligation to aircraft manufacturers Boeing and Airbus, said White.

“In the next 12 months there will be more carriers go bust and it could be some of the big names. No one is making money and there is only so long these businesses can be sustained with cash savings.”

White, who this year celebrated his 30^th year in the travel industry, said Chapter 11 for failed airlines in the US was unfair on European carriers.

“The protection offered to airlines by the US government is unfair. Troubled carriers essentially ditch their creditors and dance back into the market. Euro carriers don’t have that kind of safety net.”

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