Tough climate for airlines

Competition is fierce between airlines trying to attract a dwindling travelling public leading to bargain basement prices, so much so that there has never been a better time for passengers to travel. Richard Branson put it very well when he reminded everyone that British travellers are currently paying the same price for fares as they were when Virgin launched the airline 25 years ago.

But will this lead to further airlines going out of business? In the past 18 months around 25 airlines have gone under, including Silverjet, Maxjet, XL Airways and Oasis Hong Kong. When this happens, people who book their flights through travel agents might receive a refund but those travellers, who make direct bookings through company's website, may not be so fortunate. In this instance, the only real hope for passengers who buy flights directly is to seek cash back from their credit card company, assuming they used a credit card for the transaction, but anyone who paid using a debit card, cash or a cheque to can only hope that their holiday travel insurance provides protection against the collapse of an airline failing.

Not all travel insurance policies will offer this but some insurers offer Passenger Protection Insurance sold separately or part of a travel insurance policy but always check the small print if this is offered because these are quite often restrictive in their cover.

South African born Keith has lived in the south of England for most of his life. After graduating from University with a degree in Business Information Systems Management he decided to start Strawberrysoup; a website design company based in West Sussex and Dorset.