Unfortunately, 2018 and 2019 have been troublesome years in the tourism industry with many airlines and travel companies going out of business. One of the UK’s biggest companies, Thomas Cook is the latest airline to go bust, leaving over 200,000 passengers stranded and many more without holidays. We’ve put together the following guide to inform you of what to do if you’re affected by the collapse of an airline or travel company and how you can minimise any risk when booking your holiday.
What to do if the airline you’re flying with goes bust
If you find yourself in the unfortunate situation of having an airline you booked with going bust, what you’ll need to do will depend on whether you’re on holiday already or have an upcoming trip and the type of booking you made. Read on below and find the option that best fits your current situation.
If you’re on holiday already
If you’re already at your destination but your return flight home is cancelled, the UK branch of the C.A.A (Civil Aviation Authority) is responsible for bringing you back home. Usually you’re able to stay for the remainder of your holiday and fly home on the same (or similar) date as planned, however all circumstances are different. In the event of your airline collapsing, visit the CAA website here and you’ll be told who to contact and what to do. This should be your first port of call. Always confirm with the C.A.A first on whether your flight is indeed cancelled. https://www.caa.co.uk/home/ If you booked with a third-party travel company (e.g. Expedia, Love Holidays) rather than directly with an airline (e.g. Jet2, Ryanair), contact the company first as a matter of urgency and they’ll advise you what to do.
If you experience any financial loss due to your circumstances by having to book another hotel or similar, you may be entitled to claim the money back through your travel insurance afterwards. Check your travel insurance policy wording and contact your insurance company for details.
If you have an upcoming flight booked
If your booking was made directly with the airline, your flights will now be cancelled entirely. If you booked flights or a package through a travel agent, they may be responsible for finding you alternate flights or offering a refund. For the latter, contact your travel company first to see if they can help.
In cases where you booked flights direct with the airline or your travel company aren’t being helpful, please take the following steps as soon as possible.
1. Confirm that the airline is indeed no longer operating by checking their official website. You should also check the CAA website here. https://www.caa.co.uk/home/ Contact the CAA to confirm that your flight is indeed cancelled and hasn’t been moved to another airline.
2. Identify how you paid for the flights and what cover you have. Please follow the instructions below based on the payment method you used.
I paid by credit card – Paying by credit card is the safest option and you’re almost certainly covered for your entire flight cost under ‘Section 75’ credit card law. Read more information on this here. This applies when you’ve spent between £100 and £30,000 on a UK credit card (not debit). A credit card ‘chargeback’ may be used for lower amounts. Contact your credit card company and explain the situation as soon as possible (leaving it any longer may result in long waiting times due to many customers calling). You’ll be required to complete and send off a form to make the claim. Refunds to your credit card can take between a few days and 2 months once the form is returned – it all depends on your credit card company. In most cases, airline insolvency claims are paid out straight away without any disputes.
I paid by debit card – Paying by debit card is a little trickier as you’ve paid for your flight/s using your own (over borrowed) money. Contact your bank immediately and explain the situation. They’ll either be helpful and issue a chargeback or claim for the cost or instruct you to make a travel insurance claim.
- If you’re unable to claim a refund after paying by debit card, the next step is to review your travel insurance policy. Roughly 50% of UK travel insurance policies include airline insolvency as cover so please read over your policy terms and call your insurance company for clarity. If you are covered by your travel insurance, submit a claim form as per the company’s request and expect to receive your money within a few weeks to a few months depending on acceptance and disputes. An excess amount may be payable.
- If your travel insurance doesn’t cover you for airline insolvency or you don’t have a travel insurance policy, this is quite a tricky situation and you may be out of luck for a holiday refund. We recommend contacting your bank again and escalating the claim, applying firm pressure for the chargeback and writing a letter to the bank CEO.If your booking was part of a package holiday, you may also be covered by ATOL protection. Whilst we recommend the above credit card/bank solutions as your first port of call due to them being faster for processing refunds, if you’re out of luck with those avenues, contact the CAA to make an ATOL protection claim. The process usually takes a few months but may take up to 18 months if a vast amount of customers are affected by the incident.
I paid by cash – Unfortunately paying by cash in a travel agent branch is the least protected way to pay for your holiday. We recommend going directly to your travel insurance company to see if you can make a claim.
If your booking was part of a package holiday, you may also be covered by ATOL protection. Whilst we recommend the above credit card/bank solutions as your first port of call due to them being faster for processing refunds, if you’re out of luck with those avenues, contact the CAA to make an ATOL protection claim. The process usually takes a few months but may take up to 18 months if a vast amount of customers are affected by the incident.
If you booked your flight through a third-party travel agent
All of the above applies when booking directly with an airline that goes bust. If you book your flight through a third-party travel agent as a ‘flight only’ or ‘package deal’, one of two things could happen and it’s up to them to provide assistance.
- If you haven’t already travelled, the travel company may find you alternative flight options or cancel and refund your booking. If they don’t, the above steps should be followed, i.e. claiming a chargeback through your bank/credit card company.
- If you’re already on holiday, you’re most likely in the same position as customers that booked direct and will be flown home by the CAA.
In all cases, always contact your booking provider as soon as possible and they will instruct you what to do.
What to do if your travel agent goes bust?
If you’ve booked an entire holiday with a travel company and they go bust, not only is the flight affected, but usually hotel bookings, transfers and any extras you purchased. In most cases, the above steps to take in the event of a bust airline also apply here, but it all depends on how much you’re affected.
Sometimes, holidays can go ahead as planned if your travel company had already paid the hotel and flight bills with the third-party company you’re flying or staying with. If the travel company owned the airline you’re flying with or hotels you’re staying in, it’s a lot more likely that your holiday is cancelled.
For example:
- Thomas Cook, Jet2 and TUI have their own planes and hotels. If you book through an all-in-one company such as this and the company goes bust, you’re more likely for everything to be cancelled and your holiday affected.
- If you booked with a third-party travel agent such as Expedia, they may have booked you with a hotel unrelated to the brand and on a British Airways flight, so you could be less affected if they go bust.
Here are the steps to take in the event of your travel company collapsing:
If you’re on holiday already
If you’re already at your destination but the company you booked with is no longer in business, the first thing to do is check if your holiday is affected. Visit the C.A.A (Civil Aviation Authority) website and contact them to see if your holiday will go ahead as planned. If flights and hotels are affected, it is the C.A.A’s responsibility to bring you back home and ensure that you have a place to stay. Usually you’re able to stay for the remainder of your holiday and fly home on the same (or similar) date as planned, however all circumstances are different.
If you experience any financial loss due to your circumstances by having to book another hotel or similar, you may be entitled to claim the money back through your travel insurance afterwards. Check your travel insurance policy wording and contact your insurance company for details.
If you have an upcoming holiday booked
1. Confirm that the travel company is no longer operating by checking their official website. You should also check the CAA website here and contact them to see if your specific holiday is affected. If your holiday is cancelled, proceed to the next steps.
2. Identify how you paid for the holiday and what cover you have. Please follow the instructions below based on the payment method you used.
I paid by credit card – Paying by credit card is the safest option and you’re almost certainly covered for your entire flight cost under ‘Section 75’ credit card law. Read more information on this here. This applies when you’ve spent between £100 and £30,000 on a UK credit card (not debit). A credit card ‘charge-back’ may be used for lower amounts. Contact your credit card company and explain the situation as soon as possible (leaving it any longer may result in long waiting times due to many customers calling). You’ll be required to complete and send off a form to make the claim. Refunds to your credit card can take between a few days and 2 months once the form is returned – it all depends on your credit card company. In most cases, travel company insolvency claims are paid out straight away without any disputes.
I paid by debit card – Paying by debit card is a little trickier as you’ve paid for your flight/s using your own (over borrowed) money. Contact your bank immediately and explain the situation. They’ll either be helpful and issue a charge-back or claim for the cost or instruct you to make a travel insurance claim.
- If you’re unable to claim a refund after paying by debit card, the next step is to review your travel insurance policy. Roughly 50% of UK travel insurance policies include airline insolvency as cover so please read over your policy terms and call your insurance company for clarity. If you are covered by your travel insurance, submit a claim form as per the company’s request and expect to receive your money within a few weeks to a few months depending on acceptance and disputes. An excess amount may be payable.
- If your travel insurance doesn’t cover you for airline insolvency or you don’t have a travel insurance policy, this is quite a tricky situation and you may be out of luck for a holiday refund. We recommend contacting your bank again and escalating the claim, applying firm pressure for the charge-back and writing a letter to the bank CEO.
I paid by cash – Unfortunately paying by cash in a travel agent branch is the least protected way to pay for your holiday. We recommend going directly to your travel insurance company to see if you can make a claim.
I booked a package holiday – If you booked a package holiday with the company that went bust, you may also be covered by ATOL protection. Check your booking confirmation emails and look out for the ATOL protection badge. The CAA will also be able to confirm if the company you booked with had ATOL. Whilst we recommend the above credit card/bank solutions as your first port of call due to them being faster for processing refunds, if you’re out of luck with those avenues, contact the CAA to make an ATOL protection claim. The process can take a few months but may take up to 18 if a vast number of customers are affected by the incident.
A note on other travel extras, including hotels, car hire, car parking, transfers and more
It isn’t just the flights and hotels affected when your holiday gets cancelled. Extras such as excursions and event tickets, transport, car hire and airport parking are all significant costs that add up. If you’re unable to find an alternate holiday on the same dates, you may need to change or cancel your added extras. Here are the steps to take:
- Check the cancellation and amendment policy of the extras you booked. Sometimes they can be cancelled or changed free of charge.
- If you can’t change or cancel a ticket, contact your travel insurance provider to see if you can make a claim and recover the costs.
- If you booked your extra’s/add-ons through the travel company that went bust, you’ll be able to recover costs using the methods explained above, i.e. Credit/debit card chargebacks and ATOL package holiday claims.
How to be safe when booking your holiday
All of the above covers what you should do if you’re affected by a travel company failure, but what should you to minimise your risk when booking a holiday? We’ve assembled the following tips and advice to help you feel comfortable when planning your next trip.
The below tips apply for all parts of booking a holiday, from flights, hotels and packages, to tickets, car hire and transfers.
1. Book using a credit card
The most important advice we have is to book your holiday (and any big purchase for that matter) using a credit card and avoid using cash entirely. Under UK law, credit card purchases are protected under Section 75 (find out more here) and you’ll be entitled to a full refund if anything happens to your airline or booking company. Refunds are much faster than ATOL and travel insurance methods of protection.
Here are some of the credit cards that we recommend:
- Halifax Clarity – A card that offers zero fees on foreign transactions and you get a great exchange rate.
- 0% interest for X months cards – These are great for big purchases. Simply charge the amount to your card and pay it off later down the road. Some cards offer a whopping 36 months of zero interest. Just be sure to pay it off before the end of the promo period. See a full list of 0% interest credit cards on Money Saving Expert here.
- American Express Platinum Cashback – American Express are our favourite credit card provider for customer service. Their team will help you in any way they can and issue refunds right away. You get cashback on everything you buy with their Platinum card.
2. Buy travel insurance right away and check policy details
It’s a wise idea to buy travel insurance as soon as you book any of your holiday travel plans. Alternatively, an annual insurance policy is beneficial if you go on multiple trips per year – it can save you money and covers you every time you’re abroad.
We recommend using Compare the Market to compare travel insurance providers and find the best deal. Here are some important things to keep in mind when buying your insurance.
- The cheapest isn’t always the best option, but neither is the most expensive. All policies aren’t equal and you should carefully read what’s included. Spending a couple of extra pounds can save you hundreds down the line.
- Choose a policy with high healthcare cover
- Choose a policy with winter/adventure sports cover if you plan on any adrenaline fuelled activities.
- Disclose pre-existing medical conditions. Claims can be denied if you forget to include this.
- Ensure that your policy includes holiday cancellation and travel company failure.
- Be aware of any excess you have to pay in the event of a claim. Cheaper policies generally have a higher excess fee. Anything under £100 is good in our opinion.
- Select the correct destination/s for your policy. Travel insurance that includes the USA is usually more expensive due to higher healthcare costs in the US.
3. Consider Wedding insurance
If you’re planning an awesome honeymoon or wedding abroad, insurance is even more important! It covers you for pretty much everything that you may lose in the event of an airline, travel company, venue or any other unforeseen failure.
We recommend comparing wedding insurance options on MoneySupermarket choosing a policy that covers everything you need. Be sure to read the terms carefully. Buy your wedding insurance as soon as you start paying for various wedding plans.
4. Steer clear of airlines and companies that are economically unstable
This one is a tough one to predict as there’s no telling what airlines and travel companies will go bankrupt and when! We recommend the following resources to help you make an informed decision when booking your holiday. If there are any doubts, we advise on finding an alternate travel provider.
- Stay up to date with travel news. General news websites and the Travel Weekly site are great resources
- Stay clear of airlines that always have staff on strike. Looking at you Ryanair!!
- Search Google for status updates on the financial stability of travel companies and airlines
On the other hand, booking with a long standing and financially secure company such as British Airways or Emirates can give you extra security.
5. Ensure that your chosen travel company has ATOL protection if booking a package deal
If you’re booking a package holiday through an agent, whether it be online or in-person at a travel agent branch, check that the agency has ATOL protection.
Taken from the official Civil Aviation Authority website, ‘ATOL (which stands for Air Travel Organiser’s Licence) is a UK financial protection scheme and it protects most air package holidays sold by travel businesses that are based in the UK.”
Whilst ATOL does give you a great deal of protection, we still recommend booking with a Credit Card for that extra safety. We’ve heard of ATOL claims taking up to 18 months, whilst credit card claims are much faster and will return your funds earlier so you can re-book your holiday.
6. Take advantage of ‘buy now pay later’ or ‘deposit only’ offers
You can’t lose your money if the airline or travel agent didn’t have it in the first place! Take advantage of deposit only or ‘buy now pay later’ hotels and package holiday deals. That way, if anything happens, you’ll only be out of pocket for a small amount of money, which you can claim back if you book on a credit card.
7. If there’s news of a collapse, stay on the lookout for alternate holiday options
If there’s news of economic turmoil and the holiday company you’ve booked with going out of business, do not dismay! If you’ve followed our above advice you should be pretty protected. However, you’ll still find yourself without a holiday, which sucks!
If bad news is on the horizon, do plenty of research and be prepared to re-book your holiday if you have the spare cash (whilst waiting of a refund). On the date of the collapse, prices can increase dramatically as other affected travellers rush to re-book their holiday, so make sure you’re ahead of the game and book as soon as you hear the news.
Check out our holiday booking guide here to help you find the best prices and deals.
8. Book flexible extras
When booking extra’s such as car hire, airport transfers and airport parking, consider choosing the cancellable and amendable option. Usually it’s only a couple of pounds more and you get the freedom to change your booking whenever you want. With car hire, choose a ‘pay on arrival’ option.
You may also wish to book extras closer to the departure date of your holiday. There isn’t usually much price difference booking 2 weeks before, compared to 2 months before.
9. Don’t let economic turmoil put you off booking a holiday
Most of all, don’t let the risk of travel companies and airlines going bust scare you into not booking your holiday! If you love to travel as much as us, holidays are a must. Following the handy tips above, you should have no problem getting a refund and re-booking your holiday in the very unlikely event of a collapse. The key things to remember are:
- Book absolutely everything on a UK credit card
- Buy a good travel insurance policy as soon as you’ve booked your holiday
- Remain calm and follow the advice of the CAA if you’re affected by a travel company going bust
We hope our guide has helped inform you of how to stay ahead of the game when you’re at risk of losing your holiday and minimise all possible risks in the event of unfortunate circumstances. Unfortunately, these things happen and you shouldn’t let it spoil your trip. If you have any questions about anything we’ve talked about in our guide or you need help, get in touch. We’ll happily help you the best we can.
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