In general, there are three main rules to protecting yourself in the case of an airline going bust.
- Always book ATOL-protected trips
- Book with a credit card if possible
- Make sure you have access to your booking receipt and travel insurance documents when flying
What if my airline goes bankrupt?
Be aware that if your flight is cancelled due to an airline’s collapse (like Flybe earlier this year), you will not receive refunds for any existing ticket purchases from the airline itself. That’s because if the carrier has stopped operations completely, it’s technically insolvent and any refund claims will be rolled into its overall bankruptcy.
However, you might be entitled to compensation and travel insurance claims. These depend on whether you booked direct vs booking third party, booked with a credit card vs debit card, or booked as part of a package holiday. You’ll also want to make sure your booking was ATOL Protected.
How to claim if you booked with the airline direct…
- on credit card
If you have booked your flight with a credit card and it was of a value over £100, speak to your credit card provider as you may be able to make a claim under Section 75 of the Consumer Credit Act 1974. This makes your credit card provider equally liable for your loss along with the bankrupt flight provider. It’s also worth checking whether your travel insurance policy includes scheduled airline failure insurance (SAFI) cover.
- on debit card
Claiming a refund for a debit card booking is a bit trickier than if you used your credit card. If your current account had slipped into its overdraft when you paid for your flight, then it may be deemed to have been ‘bought on credit’ and covered by Section 75 of the Consumer Credit Act 1974 – that is, as long as your purchase was, in the same way, more than £100 – and less than £30,000.
If you were sensibly in the black when you booked, you could get the money back for your flight using ‘chargeback’. This is a system used by Visa, Maestro, Mastercard and American Express (on debit as well as credit cards) – just as long as you have proof of purchase.
- and you need to claim low cost flights (less than £100)
If you bought low-cost tickets by credit card but the total amount came to less than the £100 minimum needed to invoke Section 75 protection, then it depends on whether your credit card provider offers protection for claims under £100, so check with them directly.
- and you’re abroad when the airline goes bust
If the airline has gone bust, and you are abroad without ATOL Protection, you will need to book flights back with another alternative airline. There is a possibility that you can claim money back from the first airline if you booked direct with a credit card, your booking was ATOL protected, or it was covered on insurance, but bear in mind you will need to shell out the cash up front for the alternative flights and it may be a few weeks before your claim goes through.
Make sure you contact your own airline or insurance provider to discuss reimbursement before booking flights home.
How to claim on insurance or ATOL Protection…
- if you booked online with Skyscanner, or a travel agent
If you booked a flight-only deal through a travel agent, you may be covered by the ATOL (Air Travel Organiser’s Licence) scheme. But not all flight-only deals are. You will be covered if the agent is ATOL-protected or you received an official ATOL receipt upon payment.
If you didn’t book with an ATOL-protected agent, or you didn’t get an ATOL receipt (just an e-ticket or airline ticket) you may not be covered.
- if your flights were part of a package holiday
By law, every UK travel company that sells package holidays and flights is required to hold an ATOL certificate. Make sure you have the certificate saved prior to travel, not just a receipt or confirmation.
How to make a claim with ATOL
Check your certificate to check the individual procedures, but it usually involves filling out a form or calling your tour operator. Check out further information on claims on the ATOL website.
Will my travel insurance cover airline failure?
Unfortunately, airline financial failure or insolvency is rarely included on most travel insurance policies. However, there is no single rule for this and you should consult your own travel insurance provider to check their approach to airline failure (it may be under ‘supplier failure’).
How do I get a refund?
To find out about airlines’ current cancellation, rebooking or refund policies during the COVID-19 pandemic, you can find all the latest news and travel updates on airline websites or via the International Air Travel Association.
Here are some major airlines’ cancellation and refund policies:
- Ryanair: If your flight gets cancelled you will be given the option to request a refund, rebook or re-route your journey.
- easyJet: Where flights have been cancelled, customers will be able to transfer to an alternative flight free of charge or receive a refund.
- Jet2: If your flight is cancelled, you can amend the booking or receive a refund.
- Wizz Air: If your flight is affected by government restrictions you can rebook a comparable route, receive a refund in flight credit plus 20% of the original fare paid, or opt for a full cash refund.
- Emirates: All flights are suspended from 25 March 2020 as per the UAE government’s travel ban. If you have a ticket issued on or before 31 March 2020 you can complete a Travel Voucher request form to re-book your flight later.
- Norwegian: Norwegian Airlines is operating a limited flight schedule until further notice. If your flight is cancelled you can request a refund or opt for flight credit and get an extra 20% towards a future trip.
- TUI: TUI won’t be offering holidays departing before 16 April 2020. If your booking is affected, the company will contact you to give you the option of a cash refund or the choice of an alternative holiday of the same cash value.
- KLM: The airline is only offering refunds in the form of travel vouchers for flights affected by COVID-19 restrictions.
- Virgin Atlantic: If your flight is cancelled you can rebook, reroute or opt for an open ticket for future travel.
- Vueling Airlines: You’ll receive an email from the airline if your flight is cancelled, as well as a URL to a form where you’ll be able to reschedule your flight or request a refund.
- British Airways: If your flight is cancelled you will be able to rebook or request a refund.
- Finnair: If your flight is cancelled you can postpone it or request a refund (refunds take around a month to process).
Please check official airline websites for further details.
Further information:
UK government foreign travel insurance guidelines
Civil Aviation Authority: consumer information
What is SAFI?
ATOL
IATA Passenger Rights
If you are travelling from outside the UK, please see the EU Passenger Rights for further information.
