Well, here we go again. Flybe is the latest UK airline casualty of what has always been a competitive marketplace. It’s gone into administration, leaving thousands of passengers frustrated, angry, and there’s the inevitable cancellations and chaos.
So what do you do if your airline goes bust before your holiday? Or, even worse, while you are away?
It’s happened before and it will happen again.
Over the past twenty years, dozens of airline brands have disappeared from the skies, either as a result of mergers or because they couldn’t survive financially. Norwegian based Flyr is the most recent, having ceased trading on 1 February 2023. The pandemic made things difficult, but even in 2019, before the COVID effect began to be felt, more than 20 airlines worldwide went to the wall.
Nobody wants to think about it, but if it happens to you, what are your rights, and how do you handle it?
Are you ATOL protected?
It’s in the small print of tickets and on numerous holiday ads, but what does ATOL protected mean?
Well, it guarantees a refund if a company collapses, and if you are abroad when it happens, you will get a flight home.
ATOL is run by the Civil Aviation Authority (CAA), the airline regulator.
All UK firms selling holidays with air travel must be signed up to ATOL.
But ATOL protection depends on how you booked your flight, so it’s worth double-checking.
When ATOL does and doesn’t apply
If you booked flights alone with a UK based airline, you will get ATOL protection automatically.
If you book a package holiday in the UK through a travel agent, the ATOL scheme will also apply and firms must display their licence number in all their publicity.
If you booked flights directly with an airline, then go on to book accommodation through the same website, you may not be covered as it’s not a package deal as such, although you might still have some protection if it is a Linked Travel Arrangement (LTA).
An LTA applies to holidays booked in the UK, where you purchase flights and are then prompted to use a partner website for your hotel. They don’t transfer any personal or financial details between the two transactions, so they are ‘linked’ rather than a ‘package’, if you made the purchases within 24 hours of each other.
If you booked through a Linked Travel Arrangement, you may get insolvency protection, which gives you money back if it happens before you travel, but not if you are already abroad.
Travel firms must now tell you upfront if you’re buying a ‘package holiday’ or ‘linked travel arrangement’. If in doubt, ask before you make your final choice. Then you’ll know where you stand.
The ATOL website is the best place to get answers on any aspect of the scheme, but remember it only applies to UK based companies.
What’s the difference between ATOL and ABTA?
Just a side note, if your holiday includes flights, your protection comes under the ATOL scheme. If the package you book doesn’t include a flight, you get a different kind of protection.
For cruises and package holidays without a flight, look for ABTA protection.
We’ve put some links to useful websites at the end of this post to guide you.
What if my airline isn’t registered in the UK?
This is another potential pitfall, and has caught out UK holidaymakers in the past.
The ATOL scheme must be used by all UK based airlines, but if your carrier is registered elsewhere, you may not be covered.
The best place to check is the CAA website, which has a full list of airlines that are part of the ATOL scheme.
What to do if the airline goes bust before you travel
Eeek! You’ve heard the news, seen the horror stories on social media, and realise your holiday may be in jeopardy.
The first thing to do is contact the agent you booked through, online or in person, to make sure your booking is still in place.
If it is, then your holiday should still go ahead, just with another carrier. But expect flight times to change, as they will have a different schedule.
That’s why it’s vital to keep all your booking information safe, just in case any problems arise.
What if the airline folds while I am away?
This is the scenario we all dread.
You’re away, relaxing, for a week or so under (hopefully) sunny skies when you learn the airline that got you there has collapsed.
If you have ATOL protection, things should be smooth. You will get your money refunded, and the company must find an alternative flight home, at no extra cost to you. You need to contact your travel agent immediately to make the arrangements.
Stressful? Yes. Inconvenient? Certainly.
But you will get home, and your money back, eventually.
If you are abroad without ATOL protection, there’s a lot more to do.
In most cases, you’ll need to book flights back with another alternative airline and pay for it yourself.
Some airlines offer reduced ‘repatriation fares’ for stranded passengers and, very occasionally, the UK Government helps out. These reduced fares are usually available by telephone within a few hours of an airline going bust, so you need to act fast.
BUT – and this is vital – talk through your options with your travel insurance provider before you make any booking. They may have restrictions on what you can claim later, depending on the policy details.
Paying by credit card
It’s not foolproof, but if you pay for your flights using a credit card, there is an extra layer of protection that kicks in.
As long as the transaction is over £100, Section 75 of the Consumer Credit Act means the card company’s equally liable with the retailer/supplier if something goes wrong.
So if you booked directly with an airline that wasn’t ATOL protected, you can at least get money back from the card company.
Not ideal, but better than nothing.
Making a claim
We hope it never happens to you, but if it does, you need to make a claim as soon as you can.
How to make a claim under ATOL
There’s a step-by-step guide on the CAA website, with a list of ATOL Holder Failures, which is kept updated.
Every company’s situation is slightly different, so you need to find the carrier you booked with and follow the specific instructions for them.
You have to fill in a claim form and provide evidence of your booking and payment.
They aim to settle within 28 working days, but it can take longer if additional information is requested from you or your travel agent.
How to make a claim under your travel insurance
Airline financial failure is rarely included on travel insurance policies, but worth checking – there may be something under ‘supplier failure’.
If ATOL protection applies, they won’t be involved, as the compensation will come from the airline eventually.
If no ATOL is in place, you need to contact them immediately, and they will go through your options with you. There may not be a refund, but there could be help with additional costs incurred because of the airline collapse.
What if I won the holiday and didn’t pay for it?
We love entering holiday competitions ourselves and Pork Belly devotes a lot of time to sharing his research, so you’re in with a chance too. If you’re lucky enough to win, we hope you have a wonderful time, and you never have to face the airline collapse situation.
But it could happen.
And here’s where it gets complicated.
We always advocate reading the terms and conditions for any competition you enter, because the devil is always in the detail.
But, after carrying out a random sampling of a few of the comps on our list that involve flights, very few have anything specific on the issue. One example of good practice is Jet2Holidays, who state very clearly that the prize is neither a package deal nor a Linked Travel Arrangement, so the winner will not be covered under ATOL.
From our experience when winning a holiday, you go through a booking process with the provider of the prize, and it is the terms of that booking that would determine what help you could draw on.
As you haven’t paid for the holiday, you won’t receive a refund, but you could still be entitled to some help if the worst happened while you were away and your travel insurance (your holiday may be free, but your insurance probably isn’t included) may cover any additional expenses.
Let’s hope it never happens, to any of us!
Useful websites for UK travellers seeking compensation
Citizens Advice Bureau – tips for claiming all types of compensation for holidays
Which guide to your rights when an airline goes bust
Civil Aviation Authority – advice on solving all air travel related issues
ATOL scheme
ABTA scheme
Where to next?
• Holiday Competitions
• Lost luggage – a right pain
• Tips for great travel photos