Travel business in meltdown

A few years ago I had a meeting with the senior civil servant responsible for drawing up the White Paper on aviation. The policy then was the much discredited predict and provide and resulted in a White Paper that called for a doubling of airport capacity.

It was not sustainable then and is not sustainable now. With the collapse of XL last week (leaving 100,000 holidaymakers stranded abroad), we are seeing a travel industry in meltdown.

 http://www.indymedia.org.uk/en/2008/09/408597.html?c=on

Credit crunch, banking crisis, soaring fuel bills, belt-tightening by consumers. Now we have the added fear of do we book a holiday or flight if the company may not exist or we are left stranded abroad like 100,000 holidaymakers who booked with XL or associated companies.

This morning the 158-year-old investment bank Lehman Brothers, one of the largest and oldest banks in the US, filed for bankruptcy, sending stock markets around the world into free fall. By lunchtime today the London Stock Exchange had lost 5%. Worst effected were banking shares, HBOS lost a third of its market value this morning. The Bank of England has had to step in with an injection of 4 billion to help stabilise the financial markets.

 http://news.bbc.co.uk/1/hi/business/7615931.stm

This morning another big US bank has had to be bailed out, Merrill Lynch is to be taken over by the Bank of America. AIG, the world's biggest insurance group is seeking $40 billion just to stay afloat.

On Saturday, Willie Walsh, the boss of British Airways, warned that he expected to see 30 airlines go bust before Christmas.

 http://www.independent.co.uk/travel/news-and-advice/warning-30-airlines-will-go-bust-this-year-928774.html

As if on cue, on Sunday, another tour operator went bust, leaving holidaymakers stranded in Turkey.

 http://www.independent.co.uk/travel/news-and-advice/quarter-of-stranded-xl-tourists-return-as-new-travel-firm-shuts-930854.html

Alitalia is close to bankruptcy. If it does not receive additional financing it will run out of money this week to pay for fuel, possibly as early as today.

 http://www.independent.co.uk/travel/news-and-advice/alitalia-could-be-next-as-tourists-still-stranded-after-collapse-of-xl-leisure-929870.html
 http://www.independent.co.uk/travel/news-and-advice/alitalia-to-cut-3000-jobs-in-survival-attempt-931108.html

Last year, the boss of EuroCypria warned that if crew did not accept the leasing of aircraft to other airlines, the alternative was EuroCypria would go under.

Due to a perverse planning decision by a planning inquiry inspector, Farnborough Airport was allowed to double weekend flights. TAG Aviation who own and operate Farnborough Airport are now gung-ho about massive expansion.

Reference

Ian Griggs and Jonathan Owen, Alitalia could be next as tourists still stranded after collapse of XL Leisure, The Independent on Sunday, 14 September 2008
 http://www.independent.co.uk/travel/news-and-advice/quarter-of-stranded-xl-tourists-return-as-new-travel-firm-shuts-930854.html

Mark Hughes and Nick Clark, Quarter of stranded XL tourists return as new travel firm shuts, The Independent, 15 September
 http://www.independent.co.uk/travel/news-and-advice/alitalia-could-be-next-as-tourists-still-stranded-after-collapse-of-xl-leisure-929870.html

Lehman Bros files for bankruptcy, BBC News on-line, 15 September 2008
 http://news.bbc.co.uk/1/hi/business/7615931.stm

Keith Parkins, XL Airlines goes bust, Indymedia UK, 12 September 2008
 http://www.indymedia.org.uk/en/2008/09/408597.html?c=on

Keith Parkins, Beyond sustainability, to be published
 http://www.heureka.clara.net/gaia/

Warning: 30 airlines will go bust this year The Independent, 13 September
 http://www.independent.co.uk/travel/news-and-advice/warning-30-airlines-will-go-bust-this-year-928774.html

Michael Seamark, Who will be next to go under, Daily Mail, 13 September 2008

Alberto Sisto, Alitalia 'to cut 3,000 jobs' in survival attempt, The Independent, 15 September
 http://www.independent.co.uk/travel/news-and-advice/alitalia-to-cut-3000-jobs-in-survival-attempt-931108.html