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The airline industry is still struggling despite fall in oil price

As investors look around for a little bit of good news, Willie Walsh of British Airways has dashed hopes of a sharp recovery in the sector. Despite the recent fall in the price of oil to under $100 a barrel he believes that the damage has been done for many in the sector and more failures are expected in the weeks and months ahead.

Even though the cost of fuel has fallen substantially there is a distinct lack of passengers to sell tickets to. Indeed it was British Airways which earlier this year announced that a number of routes would be cut in order to conserve what cash flow the company has. If the mighty British Airways is struggling then we can easily assume that 90% of the industry is suffering to a greater extent. British Airways was on the brink after the 9/11 attacks and came back, but it is nowhere near as exposed now after a sustained period of cost cutting,

Those looking to book holidays this year and next should be very careful who they deal with as many of the smaller airlines and travel groups may well struggle to survive the next 6 months.

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