The purpose of this research is to review the potential effects of airline bankruptcies on the travel agency business. Tourism is a major industry on a worldwide basis. Travelers from the United States comprise the largest national segment of the worldwide tourism industry. Thus, travel agencies in theUnited States may be expected, to a greater extent than thosein most other countries, to be affected in a significant wayby airline bankruptcies.
Prior to 1973, tourism was a major growth industry on a worldwide basis. The energy crises of 1973 1974 and 1979 1980 increased the costs of travel significantly, because of jet fuel price increases. Tourism growth suffered, as a result, during and shortly after each of the energy crises. Just as worldwide tourism was poised for another growth period in the early 1980s, the most severe economic recession in more than 40 years hit the United States, and most other industrialized countries experienced economic recession soon afterwards. Thus, the anticipated international travel boom did not mater ialize.
In late 1983, however, the United States economy entered a recovery period, and, in the following two years, most of the other industrial economies also began to recover. Thus, in 1984, the long hoped for international travel boom finally got under way. By this time, however, another problem had arisento cause anxiety and trouble for both the traveling public andtravel agency management. This problem was the growing danger of the declaration of bankruptcy by airline companies.
The declaration of bankruptcy by an airline may create a variety of difficulties for travelers and for travel agents. Flights may be canceled or postponed, monies advanced to air line companies may be lost all or in part, or recovery may require an extended period of time, together with the expendi ture of more funds for legal fees and increased administrative expense, passenger travel incentives may...