'Fairly bleak winter', warns Palmair MD

8:52am Friday 12th September 2008

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MORE companies could go the way of XL Leisure, the managing director of Palmair has warned.

David Skillicorn spoke to the Echo after the third largest package holiday company in Britain went into administration and grounded all flights, stranding thousands of British holidaymakers already abroad.

Mr Skillicorn said the price of aviation fuel has gone through the roof. While fuel supplements helped with the costs several months later, it did not solve the problem immediately.

He said: "Our industry is an incredibly optimistic loud voice in terms of confidence and selling teams but it does rely on an ever-increasing number of people coming through our doors and paying a realistic price for the product."I am afraid in the industry today there is a massive amount of over capacity.

"£10 notes are being sold for £8. When you get a bit of a downturn it's all over.

"This is not going to be the end of the story. There are a considerable number of companies that are in dire straits.

"We are coming out of the summer going into the winter and for many in the industry it looks like a fairly bleak winter."

He said it was unusual for a company to collapse in September, as October was when a lot of overseas bills had to be paid.

His firm has yet to be asked for help from stranded passengers but he said they would look sympathetically at any requests made to their staff.

There are a number of steps consumers can take to safeguard their money.

Book through an ABTA travel agent, book a package holiday through an operator that holds at ATOL licence, and book on a credit rather than a debit card.

Mr Skillicorn said passengers who had booked through companies that held at ATOL licences would be protected and get their money back or be brought home probably on the day they expected, and their holiday accommodation bill settled if it was a package deal.

"Anyone else, they are on their own," Mr Skillicorn warned.