Jitters within the travel industry as Gatwick enters talks over its bank debts, and Stobart Air goes bust joining a long list airlines destroyed by the pandemic

Jitters within the travel industry as Gatwick enters talks over its bank debts, and Stobart Air goes bust joining a long list airlines destroyed by the pandemic

Remember how Flybe’s demise sent shock waves across the South West of England before we had heard about Covid-19? It seems another era. Airlines do go bust occasionally but in the last 18 months the airline industry has taken the biggest hit since the 9/11 terrorist outrage that took the sector six years to recover.

With the majority of flights cancelled during lockdowns Airports have struggled with little footfall for the shops, cafes and bars let alone the carparks. Gatwick has announced it is talks with its lenders after making a pre-tax loss of more £200 million this year already and the number of flights far below pre-pandemic levels.

Stobart Air are the latest airline to go bust having decided on liquidation as the firm was unable to find a buyer leaving 500 staff without a job and suppliers left high and dry. They flew short haul flights for Aer Lingus between the UK and Ireland and could not survive financially the drop in business caused by the covid-19 crisis when they were forced to shut down for weeks at a time.

Trans State Airlines shut up shot in the USA during the pandemic as have Compass, while Virgin Australia are in administration, and Avianca in South America have been liquidated. Air Italia, Atlas Global of Turkey, Miami air International, Ernest Airlines, Braathens Regional, City Jet, Air Mauritius, German Airlines, Thai Airways and many more have all gone to the wall during the pandemic with more to follow if things continue as they have.

Ian Carrotte of ICSM said it was no surprise the industry was in crisis with mounting debts. He said: “At times there has been around a tenth of the normal number of flights in the UK. No business can survive that type of drop in paying customers – and all those loans and furlough payments are all well and good, but loans have to be repaid. I urge all suppliers to airports, allied businesses and airlines to be very careful granting credit as when the furlough period ends there will be more administrations and that usually means you won’t get paid.”

About ICSM Credit

ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel - while at the moment there's a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach - ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk


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