Can you afford to head off abroad?

Traditionally, this is the time of year when many Brits start to think about their summer holidays, with many deciding where and when they want to go and then looking for the best deals so that they can get their holiday booked up.

However, this year could be quite different to normal, as fewer and fewer people can now afford to head overseas. Recent reports have shown that the level of passenger traffic that is going through UK airports has plummeted, and this has resulted from the drop in the number of people that can afford to go abroad in the current financial climate.

It is thought that a number of factors are affecting consumers’ decisions with regards to avoiding overseas holidays. The first is the ongoing financial crisis, which has left many people struggling to make ends meet due to lack of finance and increased bills. Another factor that has affected the decision to go abroad is the recession, which has left many people facing an uncertain future when it comes to their jobs and their income levels.

Finally, the weak pound has resulted in many people backing away from heading to certain destinations abroad because they will get far less for their pounds than they would have done a year ago. European destinations and the United States, both of which have always been very popular with Brits, have suffered enormously due to the weakness of the pounds against both the euro and the dollar.

The Civil Aviation Authority has recently released figures that show how the level of passenger traffic in UK airports has been falling, and with the recession still in full swing it is thought that these numbers could continue to fall, as consumers continue to shun air travel. Industry officials have claimed that even the budget airlines are becoming unaffordable for some people, largely because they add so many fees and charges on to the base price of the flight, such as check in costs, card handling fees, baggage fees, and more.

One aviation expert stated: ‘My gut feeling is that the boom in low-cost travel has run its course – the budget airlines are not so low cost any more.’

He added: ‘A decline like this is pretty striking. It is the inevitable consequence of airlines shrinking their flying programme. The growth of overseas property ownership has been a big growth driver in air passengers, but capital values of property abroad are also certainly on the slide. Sterling’s weakening is another factor because a lot of ex-pats rely on pension income paid in sterling.’

Another industry expert stated: ‘The fall in passenger numbers is to be expected in light of the worsening economic situation. The larger falls seen in the last quarter of 2008 are continuing into the new year, with the prospect of declining traffic in 2009 overall, which, if it occurs, will be the first time since World War Two that UK passenger numbers have fallen for two consecutive years.’

Tags: holidays, current financial climate, holiday, card handling fees, swing, growth driver