Rights if airlines or holiday companies go bust


Your rights if an airline or travel company goes bust

Your rights if the airline or holiday company goes bust will vary depending on whether you booked a package holiday or made your own arrangements:

Package holidays

All companies selling package holidays must if they (or the airline) go bust to:

  • prevent you losing money
  • help you sort out any practical problems

Tour operators selling package holidays including air travel must hold an Air Travel Organiser’s Licence (ATOL) from the Civil Aviation Authority (CAA). Your invoice from the tour operator will show that you are ATOL-protected. This is an important document. Keep it safe and take it with you in case you need to prove that you’re covered.

If an airline fails before you travel, your tour operator must offer a replacement holiday or a refund.

If the tour operator fails, and it has an ATOL, the CAA will:

  • get you home if you are already on holiday
  • give you a full refund if you have not travelled

See ‘Package holidays’ for more information about your consumer rights.

Getting home

Normally you will be able to return home on the same date and to the same airport. However, it is possible you may need to extend your holiday by a few days or fly back to or from a different airport. You won’t be charged again for your return flight or for any extra transport you need because of a change of airport.

Independent travel

If you purchase a flight directly from the airline, you will not be covered by ATOL if the airline goes bust while you are abroad. However, you can protect yourself when booking by:

  • booking through an agent that offers protection under ATOL or another scheme – check what cover the agent offers
  • paying by credit card (for sums over £100) or Visa debit card – check what cover your card issuer offers

You could also take out additional travel insurance.

Getting home

If the airline you booked with goes bust, you will need a return flight with another airline. You will have to make and pay for these arrangements yourself. If there is a delay or no other airline flies the same route, you may need to:

  • book a hotel
  • do some extra travelling at one or both ends of your journey

Some airlines offer reduced ‘repatriation fares’ for stranded passengers. These are usually available, by telephone only, within a few hours of an airline going bust (but maybe not immediately) and last about two weeks.

For ordinary fares, you can check with other airlines or local travel agents, or ask at airport information or ticket desks.

Claiming a refund

You may have a right to a partial or full refund if you booked your original flight:

  • with a company other than the airline itself – contact the company before buying a replacement flight
  • using a credit or Visa debit card – contact your card issuer

Travel insurance for independent travellers

Some policies cover airline failure, usually by including Scheduled Airline Failure Insurance (SAFI). Or you could:

  • buy SAFI as an add-on
  • buy separate holiday protection insurance