World of Property World of Property

Latest News

Turbulent times for airlines – and overseas property owners?

With airlines dropping like flies, prospective owners of overseas holiday homes need to choose their destination with particular care

Turbulent times for airlines – and overseas property owners?

Britain's weary overseas travellers are used to long lines: queues at check-in desks, tail-backs in departure lounges and whole squadrons of aircraft sitting on the tarmac waiting for take-off.

Now, though, they are having to adjust to another lengthy problem: the list of airlines going bust, along with an increasing risk of getting stranded on foreign shores.

Following the recent demise of Silverjet and Zoom, XL and Alitalia were the next to find their economic stability to be so much pie in the sky – and even industry behemoth British Airways is planning a mass offloading staff in an attempt to avoid a bumpy landing.

"We are in the worst trading environment the industry has ever seen," said BA's CEO Willie Walsh during a press conference in which he announced up to 1,400 redundancies.

"We have already seen 30 or so airlines go bust this year and it would be fair to expect a similar number of casualties worldwide over the next three to four months," he added.

"The announcement that such a large tour operator as XL has gone into administration highlights the problems many tour operators are facing at the moment," Dale Lovell of travel deals website www.travelconnect.co.uk commented. "The combination of higher fuel prices and an economic downturn means that travel companies are bearing the brunt of economic changes."

Lovell explained that while those who had an Air Travel Organiser's Licence (ATOL)-protected holiday booked will be able to claim a full refund, those with flights only – such as those flying out to a holiday home overseas – will not be able to do so.

For those booking flights only, Lovell advises the following steps:
1). Check whether your travel company is a member of the Association of British Travel Agents (ABTA).
2). Get the right documentation. You need a confirmation document from the travel organisation with receipt of money you have paid. If you're buying just a flight, you will need either an ATOL Confirmation, or the airline's ticket or flight confirmation straightaway. Check the names on the documentation match with who you've paid. Also check your bank and credit statements carefully.
3). Check whether your travel arrangements are financially protected. Many travel arrangements provided by ABTA Members are protected, but where financial protection is not automatically in place, ABTA Members can offer protection through a low-cost insurance policy.

The ongoing turbulence in the airline industry should be pause for thought, both for those who already own property overseas and those who are considering such a move.

Those who bought homes on the basis that they were easy to reach from the UK may have to rethink their usual travel plans. XL, for example, flew to many European destinations popular with British homeowners, while Zoom recently added Florida to its Canadian routes.

For those weighing up where to buy property abroad, careful research into transport options is now more important than ever – especially if your plans involve letting the property to holidaymakers.

In this respect, it is advisable for you not to pin your travel hopes on one airline, only to find getting to your holiday home overseas becomes that much more difficult – and costly – when the company in question cuts that route from its schedule, or has its wings clipped altogether.

Perhaps surprisingly, given the current economic climate, those planning to buy a home in Paris or Agadir, Morocco, will soon have more flight options open to them.

Ryanair recently announced that it will operate daily services to Paris (Beauvais) from Liverpool from 3rd November and East Midlands from 28th October, while Ryanair's London Stansted service will offer a twice-weekly return service to Agadir.

Ryanair's Stephen McNamara commented: "Ryanair continues to reduce fares this winter and we are now extending our Winter Sale to November. Passengers hoping to travel on new routes to Paris, and a host of other routes from the UK, can take advantage of these six million seats from just £10 for travel in October and November."

Fighting talk, as always, from the seldom-shy Irish airline. But the transport dogfight looks set to spread to spread to the ground as well.

Following an announcement by Air France that it is to compete with Eurostar in 2010 by running a high-speed rail service to Paris, which could take less than two hours under the company's plan to bring a new generation of high-speed trains to St Pancras station, a Eurostar spokesman hit back immediately.

"It's no surprise that airlines hit by high oil prices and congested airports are trying to turn themselves into train operators," he said. "We will continue to compete with them whether they use wings or wheels."

And Air France isn't the only airline casting an envious glance towards terra firma. Virgin Atlantic has also expressed an interest in setting up a European service. So, several decades after British Rail made the claim, could this really be the age of the train? Certainly, an increase in travel options is good news for owners of property overseas – who, at the moment, can be forgiven for nervously watching the skies.

Search for property overseas

Read the new World of Property i-mag

For more information visit:
www.atol.org.uk
www.abta.com

Article first published 19 September 2008

Picture: (c) Oxyman