June 28, 2018
The failures between 2003 and 2017 affected 154 different countries, 20 countries of which experienced 10 or more failures during this time.
Airline failures have been a weekly occurrence in the past 15 years, with an average of 54 such events a year from 2003 to 2017. There has been a lot of variation from this average, with a peak of 95 failures in 2008 and only 18 failures in 2017. There has been a gradual decline in the number of failures over the past five years due to favourable economic conditions and low oil prices.
Airline cost structures and other industry factors mean they are generally not well positioned to quickly react to increases in costs or decreases in demand. Events that can negatively impact airline financial health include:
eNett Virtual Account Numbers (VANs) are 16 digit unique Mastercard numbers that travel agencies can use to pay their suppliers in a fast, easy and safe way.
Each VAN is backed by the Mastercard guarantee, including sophisticated chargeback capabilities. This means VANs can protect against supplier default, such as from prepaid but incomplete travel if an airline fails, as well as other adverse events such as fraud.
As soon as an airline fails, eNett will know. We proactively reach out to our customers who may be affected, and typically get money back to a travel agency in around 10 days.
The protection provided by eNett’s specialist chargeback team rapidly delivers benefits to all parties in the case of an airline failure:
~USD2M was recovered by eNett for a single large European OTA in the wake of the WindJet collapse in 2012.
~USD2.3M was recovered by eNett, benefitting an estimated 6,000 end travellers, following the failure of Monarch Airlines in 2017
~USD4.4M was recovered by eNett, benefitting close to 21,000 end travellers, following the failure of Air Berlin in 2017.
- eNett Customer
*The definition of airline failures for this research includes commercial passenger airlines that permanently ceased operating because of bankruptcy, insolvency, loss of operating licence, or other ‘regulatory issues’. It doesn’t include airlines that were acquired or rebranded while still operating.
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