More woes for UK travel industry
Last week's sudden demise of Flyglobespan has had an impact on the whole UK travel industry with news of further casualties over the last few days. UK travel outfit Allbury Travel Group, also trading as Libra Holidays, Argo Holidays and Jetlife has fallen by the wayside and there are fears this could be the first of many additional casualties over the festive period. So why has the sector suddenly been hit by a spate of collapses?
Many in the industry fully expected a clampdown by the UK banking industry after the Flyglobespan collapse last week and they have not been disappointed. Due to a mixture of requests for more collateral, higher debt finance costs and general concern about both the UK travel industry and the UK economy, the burden on travel companies has increased. Many of these companies operate on wafer thin profit margins and indeed a number are starting to experience cash flow problems.
In many ways, the domino trail has begun with the collapse of Flyglobespan and there are serious concerns about the short to medium term future of some of the UK's smaller travel companies and also some concern about larger operations. This is a very difficult period for the UK travel industry not helped by the reluctance of banks to step forward with additional capital.
Share this..
Related stories
Mervyn King issues warning on UK economy
Mervyn King has again fairly and squarely dashed hopes of a recovery in the UK economy in the short term. He has issued a warning this evening that UK workers need to brace themselves for further pay cuts, or pay freezes, in the short to medium term and confirmed that he believes the UK economy will struggle to grow until the UK budget deficit is addressed. There is widespread speculation that...
Read MoreIs VAT the first crutch to be taken away from the UK economy?
Forecasts regarding the increase in VAT, from 15% to 17.5%, are causing concern with some analysts expecting a reduction of 0.7% in UK retail spending in the first part of 2010, and a further 0.2% reduction in the latter part of the year. While this will obviously have an impact upon the performance of the UK economy in the short to medium term, there is a fear that by taking away the first of man...
Read MoreUK economy in limbo
Each day seems to bring a different spin on the performance of the UK economy with a reduction in retail spending countered by a forecast reduction in inflation but there are so many other issues to consider in the short to medium term. In many ways analysts are as confused today about the direction of the UK economy as they were six months ago with many privately concerned about the potential for...
Read MorePaul Krugman hails UK economy as best in Europe
Nobel prize-winning economist Paul Krugman has today rode to the defence of Gordon Brown by suggesting that the UK economy is the best placed for recovery in Europe. Krugman believes that the various economic policies introduced by Gordon Brown over the last few months have been both intelligent and "pretty good" with a distinct possibility of a strong recovery in the UK economy in due course.
Bank of England talking up UK economy
The Bank of England has today released a report suggesting that weakness in sterling and the bank's £200 billion quantitative easing program are starting to have an impact on the UK economy. This is a very different opinion to that which the bank portrayed just a few weeks ago when many believed that Mervyn King was trying to talk down the UK economy, amid concerns that 2010 could be a very diffi...
Read More