AN INSOLVENCY specialist has warned that disruption caused by the conflict involving Iran could pile fresh pressure on already struggling travel companies with some facing the risk of collapse.

As airlines reroute flights and airspace closures continue across parts of the Middle East, experts have said smaller tour operators could be left footing a huge bill.

James Stares, director at Salisbury-based insolvency firm Antony Batty & Company Ltd, said the real financial impact may be felt behind the scenes.

“The conflict in Iran has caused significant travel disruption across the Middle East, with airspace closures, cancelled flights and major rerouting by airlines all placing tour operators under growing financial pressure,” he said.

“Although the headlines rightly focus on stranded travellers and their safety, the immediate risk sits with the tour operators who must by law absorb the financial consequences of this disruption.”

Under Package Travel Regulations, operators can be required to refund holidays, arrange replacement trips, repatriate travellers and cover accommodation costs during disruption.

Mr Stares warned this could create serious cashflow problems for smaller firms already battling rising costs and the long-term effects of the pandemic.

The warning comes after a string of insolvencies involving ATOL-protected travel companies over the past year, including Balkan Holidays UK, Great Little Escapes, Jetline Travel and Source Travel Group.

At the same time, holiday spending has dropped, with Barclays data showing travel spending fell 5.7 per cent in April following a 3.3 per cent decline in March.

Mr Stares said his firm had already received calls from concerned business owners.

“The longer-term implications of the conflict are not clear, but we can be sure of further disruption this summer,” he said.

“We would urge tour operators facing rapid financial pressure to talk to an expert without delay. Without this, the risk of insolvency could become very real, very quickly.”