Krum and the Dragon — Ed Strauss

Krum, age 11, and her brother Jebb, age 13, became orphans when their family's cottage is burned and their parents are killed by the fearsome dragon, Malcifer. One day, while working for a slavemaster in his lumber yard, the children meet an ancient oak tree, named Lord Sirion, who captures them and gives them a choice: either be killed or flee into Death Swamp and never return.
Krum and Jebb are not there long when they see a dragon attack and burn a strange airship out of the sky. They selflessly risk their lives to rescue the sole survivor of the crash, Princess Chelemba of the Golden House. Krum and Jebb then embark on a long, thrilling journey to take Chelemba north to Catalya, the capitol of Cornucopia, from where she can return to her father's kingdom in the sky.
But when an evil Sorcerer learns about Chelemba and sends Malcifer and the Wickers in pursuit, they are forced to flee across Death Swamp. Together they will face forest trolls, an army of Wickers and, of course, Malcifer. In order to succeed on her quest, Krum will face her greatest fears, and discover the truth and learn to master her unusual gift of Far Sight.