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Wednesday, 3 October 2012

Your rights if an airline or travel company goes bust

Find out what financial protection is available in the rare event of an airline or travel company going bust. Your level of protection will vary depending on whether you’ve booked a package holiday or made your own arrangements. Make sure you have asked the right questions before you book.

Package holidays

All companies selling package holidays must offer protection if they, or the airline you're flying with, go bust to:

  • prevent you losing money
  • help you sort out any practical problems

Tour operators selling package holidays by air must hold an Air Travel Organiser’s Licence (ATOL) from the Civil Aviation Authority (CAA). Your invoice from the tour operator will show that you are ATOL-protected. This is an important document. Keep it safe and take it with you in case you need to prove that you’re covered.

Check whether your tour operator has an ATOL

To check whether your tour operator has an ATOL, follow the link below and enter the company’s name in the ‘check an ATOL’ box.

Check whether your trip counts as a package holiday

Some UK airlines offer package holidays or flight-plus-accommodation or car hire combinations that include package holiday protection.

However, some airline websites link to other sites where you can book accommodation or car hire. This is a separate purchase from a different company. It does not count as a package holiday and does not include package holiday protection. You should check whether either company offers protection and, if so, what this covers. There is more information under ‘Independent travel’ below.

Your rights on a package holiday

If you are abroad on a package holiday and your airline fails, your tour operator will take care of you at no extra expense.

If an airline fails before you travel, your tour operator must offer a replacement holiday or a refund.

If the tour operator fails, and it has an ATOL, the CAA will:

  • get you home if you are already on holiday
  • give you a full refund if you have not travelled

See 'Holiday Advice from the Citizens Advice Bureau' for more information about your consumer rights.

Getting home

Usually you will be able to return home as planned, on the same date and to the same UK airport. Occasionally you may need to extend your holiday by a few days or fly back to or from a different airport. You won’t be charged again for your return flight or for any extra transport you need because of a change of airport.

Independent travel

Know your rights when you book

If you book a flight directly with the airline, you will not be covered by ATOL if the airline fails when you are abroad. However, if you wish you can protect yourself when booking by:

  • booking through an agent that offers protection under ATOL or another scheme – check what cover the agent offers
  • paying by credit card (for sums over £100) or Visa debit card - check what cover your card issuer offers

You can also take out extra travel insurance if you think it is worthwhile (see ‘Travel insurance for independent travellers’ below).

Getting home

If the airline you booked with goes bust, you will need a return flight with another airline. If there is a delay or no other airline flies the same route, you may need to:

  • book a hotel
  • do some extra travelling at one or both ends of your journey

You will have to make and pay for these arrangements yourself. 

Some airlines offer reduced ‘repatriation fares’ for stranded passengers. These are usually available, by telephone only, within a few hours of an airline going bust (but maybe not immediately) and last about two weeks.

For ordinary fares, you can check with other airlines or local travel agents, or ask at airport information or ticket desks.

Claiming a refund

You may be entitled to a part or full refund if you booked your original flight:

  • with a company other than the airline itself – contact the company before buying a replacement flight
  • using a credit or Visa debit card – contact your card issuer

If you paid money to an airline that has gone into administration, you can try claiming from the appointed Administrator. You may be able to get their details from the airline’s website or from the website of the Civil Aviation Authority

Travel insurance for independent travellers

Some policies cover airline failure, usually by including Scheduled Airline Failure Insurance (SAFI). However, many policies don’t include SAFI and some insurance providers exclude particular airlines.

You may be able to:

  • buy SAFI as an add-on
  • buy separate holiday protection insurance

Think about whether you want cover for the money you have paid and extra costs you could face if your airline goes bust. This might depend on:

  • what you paid for the trip
  • how confident you feel about the airline
  • how cheaply or easily you could get home another way

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