Tough times call for travel insurance
Travel Insurance News - 19/05/2008
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The global credit crunch has already caused the bankruptcy of nine airlines so far this year, leaving uninsured travelers stranded in their holiday destinations, paying out of their own pockets just to get home again. Anyone planning a vacation this year should take out a solid policy to help protect them in the event their airline goes under, something that could happen even to a major airline like British Airways.
The largest carrier on the North Atlantic recently announced that increases in the price of fuel and consumer’s weakening ability to spend on flights could eat up all of the record profits announced by the airline last week.
BA’s chief executive, Willie Walsh, said: “This will make it imperative for some in the industry to seek consolidation. All airlines are going to have to take serious action to restore profitability.”
Before they fold, the airlines are likely to consolidate, as Delta Airlines and Northwest Airlines have already began to do. Continental, American and US Airways are also rumored to be discussing the possibilities of alliances and mergers.
Last week an executive from BA announced that further increases in fares were definitely likely, especially considering the increasing price of fuel. Unfortunately, faced with a global recession, higher fares may not be feasible, meaning that tough times for airlines are ahead.
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