What are your options when your airline goes bust?

Travel company gone out of business? Booked flight no longer taking off? We’ve been in this boat and similar ones a few times now as we travel regularly. Hopefully we can answer some questions you may have and most importantly relieve some of the worries you have if you have found out the company you have booked your flights with has gone out of business. So what are your options when your airline goes bust?

If this has happened to you and it’s your first time booking a flight try not to let it put you off flying. It really doesn’t happen very often, unfortunately it’s just bad luck.

1. Get your money back

Top of the list of your options when your airline goes bust, getting your money back. You have spent your hard earned money on these flights and at the moment it’s tied up and the flight isn’t even going ahead. So what can you do?

1.1 Check if you are ATOL protected

You might have heard of ATOL protection, it’s a UK based program which travel agents and travel providers sign up to that protects their customers money should they go out of business. So it’s your first thing to check for – are you ATOL protected?

If you do have ATOL protection you will have been sent a certificate when you booked the holiday. You don’t necessarily need the certificate though if you have misplaced it. The travel agent will have a record of your booking and it’s their ATOL policy you’ll be benefiting from. You can read more about ATOL on the ATOL Website. You can also check for ATOL protection on their website to give you peace of mind that you’re covered.

ATOL generally covers package holidays, by European law package holidays must be protected and the ATOL scheme is the UK’s way of compliance with this law. So if you have booked your flight and hotel through a single supplier – as a package – you should have ATOL protection.

The agent you have booked with will have had to tie up the money you paid them, an ATOL requirement. This means your money is safe and will be refunded to you – although it likely won’t be as quick as you’d like.

1.2 Did you book using a credit card?

We always try and book travel on a credit card. It is frustrating that you get penalised when using your credit card with travel firms, as in the UK they often charge an additional fee to do this, but in situations like this one it’s worth it.

If you have booked your travel on a credit card, even if your holiday was not ATOL protected, you can claim your money back from your credit card provider.  You can get your money back under Section 75 of Consumer Credit Act 1974 if the cost was in excess of £100 – which no doubt your flights will have been. Check out Money Saving Expert for more information on this.

To make a claim you just need to get in touch with your credit card provider for the card you used to book your flights. They will require you to fill in some paperwork but most claims are straightforward and you should get your money returned fairly quickly.

Tip;

Note that some banks will return your money even if you booked on your debit card – it’s worth asking. They don’t have to compensate you when you have used your debit card but it doesn’t mean they definitely won’t.

1.3 Check your travel insurance policy

It’s time to dig out your travel insurance, you should be able to make a claim through your insurance policy but check the wording of your policy carefully.

Not all insurance policies are the same, some cover natural disasters, some don’t. Some cover any supplier failure, such as airlines, others only cover the accommodation provider going out of business. There will also be a cap on how much you can claim for, it’s important to make sure when you take out the policy that this cap exceeds the cost of your holiday. Remember to include transfers, activities and car hire in this figure.

If your policy covers you for the failure of the airline then contact them to make a claim. There will be a phone number on your policy documents to their claims department. They will require you to fill out some paperwork but it’s generally quite short forms. Once the paperwork is returned in our experience travel insurance companies pay out pretty quickly.

2. Make alternative travel arrangements

You have been looking forward to your holiday, annual leave has been booked and you might not know when you will next get the chance to go away. If this is your situation consider making alternative last minute arrangements as one of your options when your airline goes bust. It could be as simple as booking new flights or you may find a better deal in booking a totally different destination.

2.1 Speak to your travel agent

If you had booked with a travel agent originally they should be your first port of call when seeking alternative arrangements. Have them check their system for alternative flights as well as alternative holidays that are going on the same dates as your original booking.

The agent will want to help you – they want their commission from the sale and your repeat business if possible. Don’t go in with no idea of what you want though, make them work for you. If you had your heart set on Spain then you want them to find you an alternative option within Spain, don’t settle for France instead if that’s not what you want.

Unless you are travelling to a popular destination during peak season you will be able to find a good alternative last minute with or without the help of the travel agent.

The benefit of going with the option of having the agent find you an alternative option is that they already have your money at this point. If you are happy with an alternative option they have available you won’t need to wait for a refund to rebook or tie up more of your money. It’s a quick solution and you can walk away from the agents office looking forward to your holiday again.

The agent can just book you on the alternative option right away. You may need to pay slightly more if it’s a more expensive option or you may need to wait on some money back if it’s a cheaper option than you original booking. However you will have your new holiday booked within one meeting or phone call.

2.2 Check for alternative flights

For those who are not on a package deal you will be waiting on either your insurance or your bank for compensation to refund you for your lost flights. If you know the money is coming consider getting new flights booked on a credit card – just make sure you pay it off when the money comes in!

With so many airlines operating it’s unlikely the airline you booked with originally is the only one flying to your destination on the dates you have booked. Our favourite website for checking flight deals is Skyscanner and it really comes into its own in this situation.

Skyscanner allows you to search flights to and from any airport in the world. You can search from your home airport to ‘everywhere’ and the search results will come back with a range of options letting you choose a destination within your budget. In this case where you already have a destination in mind search for flights from your home airport (or another nearby) to the destination where you have your accommodation booked.

Example SkyScanner search for flights from Manchester to Naples
Example Skyscanner search results

You can see from the search example above that to fly from Manchester to Naples in just a few weeks time there are 630 flight combinations still available to book which will get two travellers return flights.

This isn’t an unusual result. Just because one airline has gone bust doesn’t mean that you can no longer get to your planned destination. You can have some confidence that you still have some control – even if for the time being your money is tied up with your original flight booking.

3. Postpone the holiday

If you can’t find suitable alternative flights or the original booking agent doesn’t have another option you like then you might resort to postponing the holiday.

This isn’t necessarily a bad option, you have worked hard to pay for this particular holiday and to have it taken away can leave a sour taste. If you had planned the dream holiday and the alternative options seem like you’re having to settle for something less then postponing now to have the dream holiday in a few months time is probably your best option.

3.1 Check if you can reschedule your annual leave

Most of us have to fit holidays within our annual leave entitlement – and even school holidays. It can take time coordinating different peoples schedules and if there isn’t an alternative option you’re happy with to fit within your original dates then check with your work. Can you cancel your annual leave you have booked and take it later in the year?

If you can then opt for this and start your search again. If not then you might want to consider the other options that fit within your original dates again.

3.2 Get the holiday re-booked yourself

Armed with more information on how you can make sure you’re protected against travel firms going out of business consider booking your next holiday yourself. Even the oldest companies aren’t immune to financial difficulties today and the internet allows you to book tailored holidays to suit you and your family perfectly – more so than typical package holidays can.

If you’re considering a road trip be sure to check out our guides to planning road trips in the USA as well as road trips in Europe. We also have plenty of road trip itinerary guides as well as city break guides so have a look around our site if you would like some more inspiration!

Use SkyScanner to find your flights. Book your own hotel or resort, directly with the property if you have a favourite. If not use search sites like Booking.com which have a range of hotels, resorts and apartments around the world for you to choose from. Simply choose your destination and dates to search. Viator is our go to for booking tours, you aren’t stuck with the selection the rep at the resort has chosen anymore, choose activities that best suit you and your group.

Don’t forget to check TripAdvisor too for independent reviews before booking – see if the photos people have taken live up to the expectations set by the property on their own website.

Sailing towards Manhattan on the Shearwater Classic Schooner

Hopefully this guide has been some help, if you have more questions leave them in the comments for us and we will get back to you. Whatever option you choose, enjoy your holiday!

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