Already in 2009 there has been a tremendous rise in the number of companies that are going into liquidation. Some of the companies have been big and some of them relatively small but it seems as though British Airways have been are struggling. By the time we reach 2010 we are very likely to see a new economy develop.
They have recently announced that they made a loss of 70 million pounds in the nine months to 31 December. This is where you can see that the credit crunch is immensely hurting companies, the previous income year BA had made a profit of over eight hundred million.
One of the main reasons for the downfall is because of the decline in overall air travel. Even early on in the year people decided to book there holidays in there home country destinations. Due to the drop in the power of the pound and the rise in the dollar and the Euro, it has made people want to stay put rather than splash out on extravagant holidays in the sun.
But that is not the only problem that has made the airline struggle. The constant rise in fuel prices has already made various airlines go into administration Fuel costs climbed 48% to 2.2 billion pounds but BA said it would begin to benefit from falling fuel prices in the 2009/2010 financial year.
There have already been two major airlines that folded in 2008 which were XL and zoom. The airlines in question, most of all XL, left thousands of people stranded across fifty of their flight destinations across Europe, USA, the Caribbean and Africa. But due to the company being ATOL protected travellers were able to get home safe and sounds.
This is definitely why you should also look at getting some travel insurance that covers for airlines which go into liquidation, because if they are not ATOL protected then you have a major problem, if they decide to go into administration while you are abroad.
But do British Airways really have a chance of collapsing? In my personal opinion I think not, because if one of the biggest airlines around collapses then where does that leave the rest of them? The whole British aviation economy would come crashing down and holidays prices would go through the roof. I am certain that if they did get to a point of failure then the government would step in and bail then out.
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