Page last updated at 15:48 GMT, Tuesday, 1 September 2009 16:48 UK

Airline collapse hits passengers

Queues for information at Bratislava airport
SkyEurope cancelled all of its flights across Europe

A budget airline which operates routes from the UK has filed for bankruptcy.

All SkyEurope flights have been suspended with immediate effect and a number of rival airlines are offering "rescue offers" to stranded passengers.

Slovakia-based SkyEurope, which flew out of Luton and Manchester, has warned it "may not be possible" to offer refunds to those who booked directly.

But customers who paid more than £100, using a credit card, should be able to claim money back from the card issuer.

Those who had booked the flights as part of a holiday package should be protected by the air travel organisation, Atol.

Airline collapses such as this highlight the need for a reform of the regulatory system regarding refunds
Frances Tuke, Abta

From Luton, SkyEurope flew to Prague in the Czech Republic as well as to the Slovakian destinations of Poprad, Kosice and Bratislava. From Manchester, it flew to Bratislava and Kosice.

"We are still trying to find out just how many Britons are caught up in this," said Frances Tuke, spokeswoman for travel agents group Abta.

"Airline collapses such as this highlight the need for a reform of the regulatory system regarding refunds."

'Cash burn'

SkyEurope which has been struggling to restructure its debt and to cope with falling revenues in the economic downturn, cited the "lack of sufficient interim funding to finance ongoing operations".

Vienna international airport had stopped servicing the airline's departing flights in mid-August after it missed a deadline for paying outstanding debts.

And Prague's airport had said it would not service SkyEurope flights starting Tuesday if it failed to pay what it owed.

The collapse comes as the International Air Transport Association (Iata) said that airlines worldwide were likely to have lost more than $6bn (£3.7bn) in the first half of 2009.

This figure - an average of $1bn a month - is double the amount Iata said in December that airlines would lose during the whole of 2009.

The global recession has had a major impact on the industry, with business and leisure customers cutting back on travel, and companies transporting far less cargo.

Rising oil prices have also made fuel more expensive, "intensifying airline cash burn," Iata said.

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