Thursday, 29 December 2011

Airline accident rate on course for record low

Statistics compiled by IATA show that the global airline accident rate for this year will be the lowest ever recorded. The global airline accident rate up to November was 52% lower than the average for the previous five years. The current rate for 2011 stands at 0.34 accidents per million flights.

Perry Flint of IATA believes that this is a 'long term trend' rather than 2011being 'some kind of anomaly.' The number of deaths is at its lowest level since 2006 with 486 people dying in air crashes up to November compared with the previous low of 502 in 2008.

The main contributing factor to the improved safety record over the past 20 years is the advancement of cockpit databases which give accurate readings of planes locations. This has lead to a reduction in planes hitting obstructions such as mountains and air collisions.

Africa remains the most dangerous region in which to fly with 3.93 accidents per
millions flights, a figure which is lower than the average for the previous five years in the region.

There were no serious accidents in Europe and North Asia this year, according to IATA. North America recorded one serious accident which occurred on 20th August and killed 12 people. The plane was operated by First Air in Quebec.

The most common type of serious accident in which it was 'sufficient to destroy a jet' is when planes go off the runway during take off or landing and this counts for 23% of recorded crashes.

The statistics do not include crashes involving private aircraft or deaths attributed to acts of terrorism.

Friday, 23 December 2011

Government to crack down on excessive card charges

A campaign by Which? appears to have resulted in a positive result for the consumer as the government has promised to crack down on excessive charges imposed by companies when booking items online.

Which? says that consumers pay £300m a year in card surcharges with airlines being the greatest offenders. We have all been there and felt annoyed when the charges keep creeping up and it is probably a good thing for the government to act in this way. However, the price that the consumer will end up paying once the charges are outlawed will not be any lower than they currently pay now. The effect of the change in policy will be higher ticket prices, higher luggage charges or to describe additional charges as 'administration fees' rather than 'credit card fee'. Ryanair have today come out and spoken to this effect regarding their 'administration fee' which they feel is a justifiable charge. It will be intriguing to see how that progresses.

A point that seems to be overlooked is the charges imposed by credit card companies to businesses that affect their daily business. Presumably they profit rather handsomely from the revenue of their fees? Maybe the Chancellor should look into how these charges along with increases in APD are affecting British businesses who are doing their best in difficult times. Travel companies are also at daily risk from fraud from customers. When this occurs the travel companies are often left exposed and to foot the bill for a fraudsters holiday. At times like this the protection offered from the banks is pitiful.

It is correct and proper that companies should not profit from credit card fees but fares wont be cheaper and the people who continue to profit will be the the banks.

Thursday, 22 December 2011

Is First Choice really the 'Home of All Inclusive'?

It has been well documented that holiday giant First Choice has decided to move to being an all inclusive only operator and the recent excellent TV advert has boosted awareness further. Everyone here at Alihoco thought the advert was superb and our hats go off, for once, to some savvy advertising executives who were responsible.  

The advert has helped to reinforce the First Choice brand and to drive home their change in strategy and I am sure that this will be successful as people continue to book all inclusive holidays. As a fellow supplier of all inclusive only holidays, we have been monitoring First Choice to see the reaction to its new direction, its offerings and price points. The First Choice website is excellent and attractive to use. However, the problem for these behemoths with huge running costs is the selling price.

At Alihoco we have run some exact holiday price comparisons with First Choice holidays and the results showed significant price differences between companies. The first comparison that we ran was for two people to travel from Manchester to Tenerife from 22nd May – 1st June with accommodation at Gran Oasis Resort in Playa de Las Americas. The holiday included 20kg hold luggage per person and airport transfers.
  • First Choice Total Price -   £1512
  • Alihoco Total Price -          £1180
  • Alihoco cost saving -         £332
The second search that we ran was for a family of four to travel from London Gatwick to Ibiza from 12th – 20th July with accommodation at Tropic Garden Apartments in Santa Eulalia. The holiday included 20kg hold luggage and airport transfers.
  • First Choice Total Price -  £2540
  • Alihoco Total Price -         £2173   
  • Alihoco cost saving -         £367
The final search that we ran was for two people to travel from London Gatwick – Malta from 8th – 15th May with accommodation at Seashells Resort at Suncrest in Qawra. The holiday included 20kg of hold luggage per person and airport transfers.
  • First Choice Total Price -  £1126
  • Alihoco Total Price -         £930
  • Alihoco cost saving -         £196
It would be improper and incorrect of us to claim that every holiday is cheaper with Alihoco.  First Choice is very competitive when it comes to hotels which are solely operated by themselves and include flights operated by Thomson Fly and Thomson Airways. This is particularly true for some of their hotels in Dominican Republic and Cancun.

However, recent reports have found that more and more holiday makers will travel all inclusive and to traditional holiday destinations such as the Costa’s and the Canary Islands. Alihoco is able to offer the widest possible choice of hotels and with all airlines except Ryanair and for you to see how much each element of your holiday costs rather than one overall price.

Tuesday, 20 December 2011

Kingfisher Airlines grounds 15 planes as liquidity evaporates

Kingfisher Airlines have grounded 15 of its planes in a further sign of trouble for the airline. The latest report comes after it was reported that 100 of its pilots have quit the airline and creditors such as airports and oil companies have stopped extending credit to the airline.

The chairman of State Bank of India, Pratip Choudhuri which leads the consortium of Kingfisher lenders has said that 'We are trying to help Kingfisher'. Despite the trouble at Kingfisher, there are reports that the airline will receive lending of 2.5 billion rupees from Indian conglomerate Sahara and that this would assist greatly with Kingfisher's short term financial position.

If this was the case, Kingfisher may try and eliminate all competition in the Indian market as only one of India's six airlines currently makes a profit due to agressive price competition.

It is certainly a risky gamble by Sahara if they were to do this, as Kingfisher has never made a profit under the leadership of its flamboyant owner Vijay Mallya. Kingfishers share price has dropped by 67% since the start of 2010.

Monday, 19 December 2011

Hotel development booms prior to Olympics

The economic situation is showing no signs of dampening the opening of new hotels prior to the 2012 Olympic Games.

Budget hotel chain Travelodge has announced that it is to open a further 146 locations of which 65 will be based in the capital. Travelodge have managed to open 38 new hotels in 2011 and in prime real estate locations such as Liverpool Street, Covent Garden and Old Street. The chain have also developed in areas of natural beauty such as the Lake District and in their usual out of town destinations such as Ruislip.

The vast expansion has been put down to the chains ability to raise credit quickly compared with its rivals and to snap up lucrative sites to put it ahead of its competitors. Guy Parsons, the group CEO said "This, coupled with our ability to be flexible and innovative in terms of the development schemes we can undertake, ensures we are in a very strong position. The expansion of our target list reflects the confidence I have in the ability of our property team to move quickly and secure the best sites,”

The expansion of Travelodge represents an interesting issue going into 2012 and beyond. The first is if Travelodge will be able to maintain high occupancy rates after the Olympics. If they are unable to do this it could create problems in terms of paying back credit which has been easy to obtain. The group could also be affected adversely by fluctuations in the property market if they are to acquire sites at the wrong time. Despite the issues mentioned, the largest effect could be felt by independent hoteliers who are driven out of the market by the low price and convenience of Travelodge properties. We are constantly being told about the homogenisation of Britain's high streets and Travelodge will not slow down as an act of sympathy for the small business owners.

Time will tell if their business will continue to flourish or if there will be a steady backlash from British citizens and tourists who become tired of the same old hotel stays.

Thursday, 15 December 2011

Egyptian tourism feeling chill compared with 2010


The Christmas and New Year periods are usually a time for operators in the Red Sea to make profits to see them through the leaner periods but occupancy rates for this year are expected to be around 50% lower than levels in 2010.

The occupancy rates of around 20-25% are due to Egypt being hit badly by several key factors. The first being the January 2010 uprising to topple Hosni Mubarak and the continued uncertainty surrounding the future of the country which continues to rumble on with elections and violent clashes in November.

A further reason is a decline in the disposable income of potential travellers from UK and Eurozone where the enture region is clouded in a feeling of uncertainty over the economy and jobs.

Moataz Sedky, deputy director of tourism at Travco Travel which operates 48 hotels and resorts across Egypt thinks that 2011 has been a bad year:

'The Red Sea is mainly dependent on charter flights from European cities, English visitors, for example rank as number one tourists coming to the Red Sea, especially for Travco Group’s hotels. They usually fly first to Sharm El-Sheikh with a frequency of about 60 flights per week. This year, there are about 30 flights a week from the British market.'

The Red Sea has also been a popular destination for Russians but this has been damaged by banning travel to the area which continued for a few months after the revolution. The actions by the Russian governments have left a hangover for The Red Sea as it has damaged the reputation of the safety of the country.

Despite this, Moataz Sedky has reported a rise in new clients from areas such as Romania and Serbia due to the deals on offer 'but these are not our regular clients. Our regular clients are mainly from Britain, Germany, or Russia.'

Tourism revenue in Egypt is expected to reach around $9bn this year compared with $12.5bn in 2010.

The situation in Egypt represents an interesting case study of the situation of tourist areas in the world. It could be argued that tourism levels from 2006-2010 were artificially high and that too many hotels have been built for a realistic number of visitors. This will lead to tourism levels to decline or plateau.  Alternatively it could be that 2011 was a particularly bad year. The new Egyptian government will hope this is the case but maybe the boom years have been and gone.

Wednesday, 14 December 2011

More high street woe: Thomas Cook to close 200 stores

This morning saw the release of Thomas Cook's trading figures, which made particularly grim reading. The £430m of writedowns has pushed the tour operator into a full-year pre-tax loss. The group have so far managed to re-coup funds through the sale of stakes in Spanish and Mexican hotels, National Air Traffic Service and reduction in the size of its aviation fleet.

Thomas Cooks restructuring is likely to be felt hardest in the UK as the operator will attempt to turn round it's business through the closure of 200 stores. This is particularly bad for the employees of these stores but also for Britain's high streets.

Mary Portas has recently unveiled an action plan to improve Britain's high street's but the closure of travel agents on high streets may not be entirely down to the reasons which she gives in her report. Unfortunately the traditional model of visiting your travel agent to book a holiday has now become outdated. Customers are able to learn more online about destinations and hotels than ever before and also have greater confidence in booking online.

A survey conducted by Alihoco found that 92% of people aged between 25-40 were happy to book a holiday online without talking to anyone or entering a shop. The results are not surprising as by booking online you are able to book at any time of day, in the comfort of your own home and to also directly compare prices between rival companies. It is also likely that the operating costs of online travel agents are lower than high street chains and the online agents are able to sell holidays at a lower cost which is often ultimately the deciding factor for customers.

The situation on Britain's high street certainly needs to be improved, but sadly it seems that it will have to do this without travel agents occupying as much space in Britain's towns.

Tuesday, 13 December 2011

Jet2 Survey: People to still holiday despite recession talk.

A study by Jet2 has found that people will not be deterred from holidaying despite talk of a double dip recession or the eurozone crisis. The study focused on 2012 plans with 28% of people thinking that a holiday is vital to their wellbeing, while 25% would forego other luxuries in order to have sufficient money to go on holiday.

The survey also found that popular Spanish destinations such as Alicante, Majorca and Malaga will remain popular along with Turkey and Crete. It is also expected that many Brits hope to flee the country during the Olympics with 64% saying that they would like to be on a beach rather than in the UK during this time.

What do you think? Do you see a holiday as a necessity or is it really a luxury to be enjoyed every few years?

Alihoco a FCO 'Know Before You Go' Partner

We are pleased and very proud to announce that Alihoco (The All Inclusive Holiday Company) has been made a partner of the Foreign and Commonwealth Office (FCO) ‘Know Before You Go’ campaign.

The stated purpose of the partnership is to bring together the Foreign and Commonwealth Office with key travel industry partners to help British nationals stay safe overseas.

Alihoco Managing Director, Tom Warsop said: “We are very proud to be made a partner in this important campaign and we support the FCO aims and messages fully.  The benefits that the ‘Know Before You Go’ campaign can bring to our customers and British tourists in general are vital to happy, trouble free traveling.”

About the Know Before You Go Campaign

Whatever your reason for travelling abroad, you’re sure to want a trouble free trip.  Many of the things that often go wrong for travellers can be prevented or made less stressful by taking a few simple precautions. So it makes sense to spend a little time getting prepared before you travel – you could save yourself a lot of problems later on.

With this in mind, we are working with the Foreign and Commonwealth Office (FCO) to help British nationals stay safe abroad. The FCO website ( offers straightforward travel advice, top tips and up to date country information to help you plan your holiday.

Tips include:

·       Make sure you have valid travel insurance, even if you’re only planning a short trip.
·       Check what vaccinations you need by visiting, your travel health clinic or GP at least 6 weeks before you travel
·       Read up on your destination, including local laws and customs.
·       Make photocopies of your passport, visas and insurance details and leave a copy with a relative or friend at home.

You can also find handy checklists to use before you set off and whilst you’re away. Plus it’s worth reading up on what the local British Consulate can do to help you if you run into problems abroad – and what they can’t do.

For all this and more information, visit the FCO website: Or if you prefer, call the 24 hour FCO travel advice line on 0845 850 2829

Huge holiday complex planned for Magaluf


Plans have been unveiled for a 'super-modern hotel' complex in Magaluf, Majorca. The complex is to be named the Sol Cavia Resort and will be implemented on land occupied by existing hotels after planning was granted for the complex. The work is to begin in winter 2012.

Jaime Martinez, the advisor of the Ministry of Sports and Tourism of Spain thinks that the project could be 'ideal' for the environment and investors as it will use existing hotel space.

The new resort will incorporate several functions including hotels, tourist attractions and shopping areas and hope that it will be the catalyst for an improvement to Magaluf which has been in decline in recent years. The projected costs for the resort is €130-140m and will be undertaken by Melia Hotel's the largest operator in Spain. Itwill be designed for 5000 people in total at the peak season.

The move is clearly good for Magaluf in the short term and the jobs that it will provide. I just hope that these large chains don't borrow too much to finance these projects and to exacerbate a culture of projects with the assistance of vast loans.

Monday, 12 December 2011

Traveller spends €50,000 on wine at duty free in Paris

An airline passenger has made a record purchase at Paris CDG Airport by buying six bottle of wine for €50,000. The six bottles included some of the most famous bottles in history with a bottle of Romanee Conti 1995, a Chateau Margaux 2003, two bottle of Chateau Lafitte 1982 and two bottle of Petrus 1980.

The purchaser was described as a shopper from 'the far east' and beat the previous record last year when a woman spend nearly €30,000 on three bottles of wine.

A spokesmand for CDG airport said that 'high quality wines sold better at the end of the year.'

More than a million bottles of wine and nearly 400,000 bottle of champagne are purchased from Paris' two airports each year.

Sunday, 11 December 2011

Etihad Airways introduce chefs in first class cabins

Etihad Airways have introduced trained chefs in its first class cabins on board flights to London, Sydney, Melbourne and Paris. There are to be further destinations launched by early 2012.

The implementation of chefs comes after an announcement in May and the recruitment of 110 chefs who will be dedicated to the diners in its Diamond First Class cabins. The chefs will prepare dishes from a pre-stocked pantry which includes the finest cuts of meat, sauces, spices and fresh vegetables. Etihad have also timed the change with the introduction of a new menu now called The Mezoon Grille. Passengers will now be able to choose from six meat and seafood options, four sauces and four side options all prepared to order.

Commenting on the move, Lee Shave, Etihad Airways' Vice President said: "By introducing First Class Chefs and refocusing our unique Food and Beverage Managers in business class, Etihad Airways has created the most robust inflight culinary team in the skies. We have consistently elevated our inflight dining experience by putting culinary experts in airline roles as opposed to airline experts in culinary roles. In this way, our innovative team is challenging industry standards and finding new ways to bring a fine dining restaurant experience to our guests, both on ground and in air."

Very cool!

Friday, 9 December 2011

Duty free scammers jailed

Two airport workers who stole more than £16,000 worth of duty free goods to sell in a pub was jailed on Monday.

John Hedley and John Christie were responsible for stocking duty free trollies at Heathrow Airport but instead helped themselves to the items. The pair smuggled out items including jewellery, perfume and watches and sold the items at a nearby pub. Hedley and Christie were each jailed for 12 months at Isleworth Crown Court.

It is thought that the pair would store the items in their van before taking the remainging stock on board to be sold in flight. On 26th November the pair were arrested at the Three Crowns Pub and £9,500 worth of goods were found in the back of Christie's car.

Both pleaded guilty to their offences.

Thursday, 8 December 2011

easyJet to trial specialist volcanic ash detector

A Norwegian inventor is in the final stages of developing a specialist detector which will give accurate readings of the level of volcanic ash in the atmosphere. Dr Fred Prata has created the Airborne Volcanic Object Imaging Detector (or Avoid) in the hope that it will detect dangerous ash if it is in the atmosphere or if a volcanic eruption has occured. It will then test that it is either unsafe to fly or fine to operate and not cause huge disruption to passengers and the aviation industry.

Avoid has been created after easyJet contacted the Norwegian Institute for Air Research who pleaded for a rational approach to dealing with ash clouds.The tubular devices will be attached to the wings of aircraft and operate through infrared radiation to find where an ash cloud is, giving the pilot time to fly around it. It will also use satellite data and atmospheric modelling to create a comprehensive picture of where ashclouds are and in which direction they will move.

Explaining the device, Dr Fred Prata said: "It has two fast-sampling thermal infrared cameras which make images of anything that's in front of the aircraft. The two cameras have been tuned to see the signature of silicates, which are the components that make up volcanic ash. They're able to see silicates up to 100km – maybe more – away if you're flying at 33,000ft, and that information can be relayed straight back to the pilot in the cockpit and he's able to see volcanic ash in the atmosphere ahead of the aircraft and manoeuvre around it."

Avoid has so far been used for around 30 hours of testing around Mt Etna but not yet attached to a passenger jet and this is likely to be the true test of the device. If this can be done and approval granted by the European Aviation Safety Agency, easyJet will start using the technology from summer 2012.

It is hoped that the technolgy will allow the industry to deal better with the an eruption should Katla eventually erupt.

Wednesday, 7 December 2011

Westin Hotels launch in Abu Dhabi

Luxury hotel chain Starwood Hotels & Resorts Worldwide, Inc. have today announced the launch of The Westin Abu Dhabi Golf Resort & Spa in the emirate. The hotel features 172 guest rooms, several restaurants amd lounges as well as being located along the fairways on the Abu Dhabi Golf Course.

The hotel is also in an excellent location to down town and five miles from the vast exhibition centre. The property has been opened in conjunction with the Tourism Development & Investment Company who develop cultural, residential and tourism destinations in Abu Dhabi.

Roeland Vos, the 'grand fromage' of Starwood Hotels & Resorts Europe, Africa and Middle East is clearly pleased at the development:  “We are excited to introduce the Westin brand in Abu Dhabi in association with the Tourism Development & Investment Company and with this opening, we hope to elevate the emirate’s position as a leading tourism destination in the region. We believe that the hotel will be a leading wellness retreat in Abu Dhabi’s emerging centre.”

Good luck with the venture!

Alec Baldwin kicked off plane for playing game on phone

Actor Alec Baldwin was ordered off a plane yesterday at Los Angeles Airport after having an argument with a flight attendant over a word game he was playing on his mobile phone. The actor was asked to get off the plane which was bound for New York for playing the game Words with Friends while the plane waited at the gate.

Baldwin's spokesman, Matthew Hiltzik said: "He loves 'Words with Friends' so much that he was willing to leave a plane for it." Hiltzik said that Baldwin left the plane and boarded another American Airlines flight to New York.

This was not the end of the matter as Baldwin took to his twitter page to mock American Airlines flight attendants by saying its - 'where Catholic school gym teachers from the 1950's find jobs as flight attendants.'

Tuesday, 6 December 2011

Sir Stelios to launch Fastjet in Africa

Sir Stelios Haji-Ioannou has announced that he is to bring his brand of low cost travel to Africa. The airline will operate under the Fastjet brand which was launched in September. The popular entrepreneur will take a 5% stake in the venture which will be funded by Rubicon, a London based investment fund. His stake in the venture could rise to 10% if the brand is to grow and be established for 10 years.

When Fastjet was created it was seen to be a direct rival to easyJet with whom Haji-Ioannou is having a fractional relationship despite owning 38% of the budget carrier. It was foolish of those including myself to think that Haji-Ioannou would bite the hand that has paid him handsomely and the move into Africa could be a masterstroke.

Commenting on the move, Sir Stelios said: "Africa must now represent the final frontier of this aviation revolution, which started in the US in the 70s and which I was proud to have led in Europe in the 90s."

Haji-Ioannou will receive £80,000 per month from Rubicon for his expertise. The move by Rubicon will not be completely new as the venture will be run with Lonrho who already control the African airline Fly540 and a stake in the market.

The move is likely to earn Sir Stelios further revenue as Lonrho have already signed up to use easyHotel brand on a chain of 50 hotels to be opened across Africa by 2016.

Monday, 5 December 2011

Air France in budget flight fight back

Air France have announced that they are to launch 16 new routes from Toulouse from April 2012. The new routes will see the national carrier fly to destinations such as Berlin, Prague and Vienna in an attempt to fend off and capture easyJet's market.

The 16 new routes will create 28 in total from Toulouse. The move marks further progress after the airline set up a hub in Marseille and a further six routes from Nice.

Air France hope that the new hubs will contribute an estimated €950 in sales in 2012. Commenting on the move, Chief Executive Officer Alexandre de Juniac said 'The idea is to add the best practices of low-cost carriers, with the full services of Air France and attractive fares.'

This investment is in contrast to airlines cost cutting measures that are currently taking place. These cost cutting measures include refurbishing business-class cabins in the Boeing 777 fleet rather than new aircraft. They also
plan to utilise Airbus SAS A320 aircraft in Toulouse which can fly for 11hrs 30 minutes a day compared with being used for 8 hours and 15 minutes whilst in paris.

The airline's low cost traffic accounts for around 24% of the national market which is around half of similar operators in Germany and Spain. The ploy by Air France will be an attempt to replicate Germanwings and Vueling SA. However, It looks as though Air France could be in for a battle as easyJet have also announced that they are to dedicate two Airbus A319 planes to its bases in Toulouse and Nice.

Look's like their will be plenty of choice!

Sunday, 4 December 2011

CAA takes specialist advice over Thomas Cook situation

The Civil Aviation Authority (CAA) has hired US firm Alvarez & Marsal to offer advice on how to handle a major insolvency should the situation at Thomas Cook worsen.

It is a sensible move by CAA as despite receiving £2.50 per passenger as ATOL protection, a problem with a major player such as Thomas Cook would put the CAA under huge financial strain. The organisation is still estimated be £40m in debt after the collapse of large operators such as XL, Goldtrail and Holidays 4U.

A similarly serious prospect for Thomas Cook is for CAA to revoke the airlines Air Operator's Certificate (AOC). This could potentially happen if Thomas Cook's financial problems pose a threat to aircraft safety.

The final risk that A&M is likely to be helping the CAA with is if Thomas Cook was to be broken up as part of a restructure programme. The CAA will be keen to protect their own interests and ensure that its income from their scheme will be protected and maintained should such a process take place.

Commenting on the issue, the CAA were predictably cagey: "We never comment on the financial position of any ATOL holder. Anybody who books an ATOL-protected holiday in the UK can be confident their money is fully protected by the CAA."

Friday, 2 December 2011

Passengers to pay additional tax on flights already purchased

Following on from George Osborne's speech this week, it has been announced that passengers who have already bought tickets which depart after 1st April 2012 will be required to pay the additional APD on their fares.

Airlines are expected to collect the money from passengers and the cost will depend on flight duration and class of travel. APD on economy short-haul flights will rise £1 from £12 to £13. Tax on destinations in Band B will increase £5 from £60 to £65. APD on flights to destinations such as the Caribbean and Thailand will increase £6 from £75 to £81. The destinations furthest afield will be required to pay £7 extra if they have an economy class ticket.

Passengers in premium classes will be required to pay double these rates.

Commenting on the issue, Julie Southern of Virgin Atlantic said - “It’s completely unacceptable that millions of passengers now face an additional tax bill on tickets they have already paid for. We have been warning the government for months of the impact this will have and urged them to avoid this unnecessary situation. Hundreds of thousands of passengers have already booked travel with us after April 1, meaning millions across the industry are likely to be impacted. People would never be expected to pay extra duty for the petrol already in their cars or wine in their fridge. Why does the Treasury think it acceptable to retrospectively charge airline passengers?”

What do you think? Will the coalition get another term at this rate? They seem to be upsetting just about every section of society!

Thursday, 1 December 2011

American Airlines insist Boeing and Airbus order still 'rock solid'despite bankruptcy

American Airlines announced plans five months ago to buy 460 planes from Airbus and Boeing in a deal worth £24.7bn, with a further option to buy an additional 465 planes. Despite this weeks news of filing for financial protection, the airline insists that it will still proceed with the worlds largest order of commercial aircraft.

The airline filed for bankruptcy protection after it's fourth consecutive yearly loss attritubed to high fuel process and large staff costs. Commenting on the situation, Tom Horton, Chief Executive of American Airlines said - "When we're completed with this process, our company will be competitive and poised to grow and prosper and capitalise on these aircraft orders,"

Mr Horton's optimism is encouraging but the deal is likely to be out of his hands and at the mercy of a New York bankruptcy court. Part of the bankruptcy is the court's power to reaffirm or reject contracts that require spending a troubled company's money during the 18 months after Chapter 11 reorganisation.

Commeting on the likely outcome, Stephen Selbst of New York law firm Herrick, Feinstein LLP said: "The court would be extremely reluctant to approve entering into a new agreement at a time when the shape and direction of the reorganisation plan is uncertain."

It appears that American Airlines are in a problematic situation where their current fleet is inefficient and unattractive to consumers but need new planes to attract business and operate cost effectively.

Time will tell what will happen with the iconic airline.