The collapse of XL, the third largest holiday company in Britain has triggered fears of bankruptcy among airlines. The chief executive of British Airways warned that 30 more airlines are heading towards bankruptcy before Christmas due to soaring fuel costs and global economic downturn.

According to Willie Walsh, the travel industry is passing through the worst trading environment. He expressed concerns that a similar number of airlines which closed this year would be the casualties of bankruptcy worldwide, over the next 4 months. He announced 1,400 redundancies at British Airways.

The industry experts apprehend that smaller tour operators and airlines would be the worst affected and cautioned passengers to book only with those who could return their money in case of bankruptcy.
According to aviation consultant John Strickland, at JLS Consulting, the chances of failure in coming months were more with the UK carriers, which are not cash-rich like British Airways and Ryanair, to sustain the rising fuel costs.

This year was more difficult for the travel sector due to a big slump in sales, economic slowdown in the UK and the phenomenal rise in costs of travel companies and airlines due to the doubling of jet fuel prices. TUI Travel and Thomas Cook, the biggest tour operators in Britain have announced cutting of 8% in the number of holidays on offer for next summer. BA and Ryanair announced capacity reduction during winter season, but smaller players lack the resources to survive in the difficult period.

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