Travel insurance

What to do if your airline collapses

28 March 2019 | Updated 5 March 20205 min read

Front view of landed plane at sunset

UK airline, Flybe, has today entered administration and all flights, including those operated by Stobart Air have been cancelled. Would-be passengers should not go to the airport and are being urged to make alternative travel arrangements.

If you've been affected by the Flybe cancellations, either prior to travel or during your holiday, you need to know your rights. So whether you are stranded in a foreign destination, or you never took off and want to know if you will get your money back, our guide will make things clear.

What happens if I am due to travel with an airline that has collapsed or has ceased operations?

You will not be able to travel. All flights will be cancelled and your booking will not be transferred to another airline. Flybe is advising passengers not to go to the airport and to book with other airlines, rail or coach operators if possible.

UK airlines, easyJet and British Airways, have announced special 'rescue rate' fares on certain routes for customers who have been affected by the cancellations. Rail Delivery Group has also agreed to provide free travel to affected passengers.

If you were due to travel with Flybe franchise partners, Eastern Airways or Blue Islands, you should contact the airline directly to confirm your travel arrangements. If you were due to fly on a codeshare flight, you must contact the partner airline directly for assistance.

Can I get a refund?

This depends on what type of holiday you have booked. There are three main scenarios here.

If flights with the now-defunct airline are included in an ATOL-protected package, you need to contact your travel agent or tour operator. They will try to make alternative travel plans for you by offering an alternative flight or a change of date for your trip. If this isn’t possible, you will be offered a full refund. Hopefully, your dream holiday will not be too badly affected.

If you booked a flight only via a travel agent, the sale might be covered by ATOL and this means that you can apply for a refund. If this is the case, you should have received an ATOL certificate at the time of booking. It’s likely that your holiday will be delayed but you might not lose out financially.

If your flights were booked directly with the affected airline, the sale was not covered by ATOL and you are not entitled to a refund. However, if your flights cost more than £100 and you paid for them with a credit card you will be protected by Section 75 of the Consumer Credit Act 1974. And, if you paid with a debit card, you may be protected by the chargeback scheme.

If you paid via any other method, there is a chance that you could reclaim some of your money from the administrator of the airline. Sadly, there is the possibility that you will get nothing at all.

Can I claim on my travel insurance?

Some travel insurance companies will pay out for cancelled flights as the result of an airline collapse. This is by no means standard, and is often quite rare.

Check your policy for Scheduled Airline Failure Insurance (SAFI) or End Supplier Failure. If your policy does not include this and you are worried, you can buy a stand-alone policy.

You can find more information travel insurance and the Flybmi collapse on the Civil Aviation Authority (CAA) site.

What about other holiday elements, such as a booked hotel?

You don’t need to worry if you have booked a package holiday as your travel agent will rearrange travel and other elements of your trip.

If you booked your flight directly, it’s likely that you also booked direct with other providers, such as hotels, villa owners or car hire companies. Your insurance policy might cover losses that result from cancellation.

However, you have a contract direct with providers and if you know that your insurance won’t pay out, it is up to you to get in touch and check what happens next. The providers are under no obligation to refund you or to postpone the booking on your room/villa/car etc. They might be quite happy to arrange a more suitable date with you, but be prepared that you might lose a deposit or even the full amount if they are not so accommodating. You might even have to pay a cancellation fee. Be polite and give the provider as much notice as possible to stand the best chance of a favourable outcome.

What happens if I am away when the airline collapses?

Once again, the outcome here depends upon how your flight/holiday was booked.

Let’s look at ATOL-protected package holidays. Just like the scenario prior to travel above, your travel agent or tour operator will find you an alternative flight home – usually on the date you were due to return from your holiday. Travellers who booked ATOL-protected flights only via a travel agent will also be able to fly home at no extra cost.

Some airlines offer package holidays. If your package holiday was booked via the airline that has collapsed, the CAA is likely to provide for your return flight. Speak to a holiday representative at your resort or get in touch with the CAA direct.

Once again, the passengers worst affected by an airline collapse are those who booked a flight only direct with the airline. As the sale was not covered by the ATOL scheme, you will have to make your own way home by paying for a new ticket from an alternative airline.

But don’t despair just yet! Following Flybmi's collapse this week, a number of airlines including Ryanair have capped flight prices from some destinations served by the defunct airline, making the journey home that little bit more affordable and a little less stressful.

If your travel insurance policy includes scheduled airline failure insurance, as mentioned above, you can reclaim the cost of this extra fare.

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