Backpacker travel insurance could be an option for people seeking a flight in Australia as the global downturn is reducing the number of airlines able to offer cheap rates.
Virgin Blue lost $100 million (£45.4 million) in the second half of 2008 as a result of reduced demand and escalating fuel costs and the company has said it may not be able to sustain low cost for much longer.
The company has invested significant sums in expanding its service across Australia and targeting business tourists but economic turmoil has led to a decline in this market.
Brett Godfrey, Virgin Blue's chief executive officer, said: "At the moment we're very happy to discount but the discounted fares out there will be difficult to sustain with the level of capacity that we have."
Tiger Airways and Jetstar look set to become the only budget airlines in Australia and therefore potentially the preferred choice of backpackers from all over the world, many of whom may have bought
gap year travel insurance.
Many backpackers choose to travel in Australia on overnight bus services so as to save money on shorter journeys.
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