Press Release: December 21, 2009
Globespan collapse highlights the need for travellers to check their financial protection
International Passenger Protection Limited(IPP), the worldwide leader in travel financial failure insurance, advise that the collapse of Globespan demonstrates the necessity for all travellers to check their holiday has some form of financial protection either through their travel agent, travel insurance or ATOL. This follows a warning last month from ProtectMyHoliday.com, the specialist travel protection website, that there would be airline failures over the festive period.
As a budget airline an estimated three quarters of Globespan customers booked their ticket directly via their website. These tickets fall outside of the governments ATOL scheme which protects travel arrangements sold as packages as opposed to an individual component booking. Various travel trade sectors are calling for the ATOL scheme to be extended to cover airline failures but IPPs Director Paul Mclean explained this is just realistic or feasible ATOL provides a great protection service for package holidays against tour operator insolvency but has for considerable years been in a huge deficit and even the recent introduction of a £1 levy last year the public have seen an increase of 250% to £2.50 in the levy charged to them with the fund still in the red. To now consider adding the risk of airlines collapsing which are some 100 times the size of a tour operator is irresponsible and shows a clear lack of understanding on these potential risks. Not only that the levy would need to be £10 and upwards per person. Surely the public deserves the right to an informed purchase as to whether any part of their holiday is protected or not and the freedom to make their own choice to protecting or not.
The success of websites such as www.tripadvisor.com demonstrate the popularity of independent travel providing freedom to consumers to design their travel arrangements to meet their desires. Estimates are now that over 50% of overseas travel from the UK is not sold as part of a package. The millions of trips which are not ATOL protected are increasingly being covered by travel insurance providers who provide Financial Failure cover on their retail travel insurance policies with sections such as Scheduled Airline Failure and End Supplier Failure. Some 10% of travel insurance policies included such cover in 2008 which has now increased to 50% already in 2009 and will no doubt increase with current demand after such further airline collapses. The cover provides a refund if the loss occurs prior to the trip, which can be put towards making alternative arrangements. If an airline collapses during the trip then the cost of replacement tickets is covered, which are usually several times more than the original ticket value.
For those who do not have cover in their travel insurance policy then stand alone policies are available from stand alone cover web sites such as ProtectMyHoliday.com where travellers can purchase a tailored policy to financially protect their trip.
With over 60 airlines collapsing since the start of the recession, the airline industry expected to lose 11 billion during 2009 and stabilisation not expected for several years it is important that travellers understand what protection is in place for and what options are available to them.
IPP is the largest supplier of Scheduled Airline Failure Insurance (SAFI) and cover for other parts of the holiday in the UK and world-wide operating in over 30 countries.
IPP operates as an underwriting agency on behalf of insurers and re-insurers whos combined net worth exceeds Euro 100 Billion
For more information, please contact:
Michael WardMichael Ward
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