Page last updated at 09:47 GMT, Thursday, 17 December 2009

Q&A: Options for passengers of failed airlines

Traveller with baggage
Some have more protection than others if an airline goes under

Scotland's biggest airline Flyglobespan has collapsed leaving passengers stranded and 800 staff facing the loss of their jobs.

It comes after the failure earlier in the year of SkyEurope and the collapse of low-cost transatlantic airline Zoom and travel group XL in 2008.

So what happens if you have booked a flight on an airline that hits difficulty?

Are all passengers protected equally?

No.

Protection varies significantly depending on how you paid for the ticket and if it was a stand-alone purchase or part of a package.

In simple terms, passengers who booked with a package holiday are in the best position.

And passengers who paid with credit cards have a decent chance of getting their money back.

What happens to passengers who are stranded and what recourse do they have?

For those with flights that are part of a package deal, it is the responsibility of the tour operator to get people home, under package travel regulations.

Package deal customers are not meant to spend any extra money on the return leg.

What compensation is available?

Under the Consumer Credit Act, if a plane ticket was bought with a credit card, passengers can reclaim the cost of the failed service from the credit card firm, if it exceeded £100.

Compensation only applies to the part of the journey that the airline failed to provide - so if the outbound journey has been taken, the refund is for the return leg.

People who bought tickets with Visa debit cards should contact their current account provider, who will attempt to recover the money for you.

Non-UK customers are advised by the Civil Aviation Authority to contact their country's aviation/consumer protection organisation or their credit card firm for advice and information about refunds and assistance.

What isn't covered?

If a ticket was bought with a debit card such as Switch or Maestro, this protection does not apply.

Visa debit card holders have a better chance of getting their money back, because of a protection scheme Visa has agreed with banks that issue Visa debit cards.

If a ticket was bought with cash, consumers are not protected.

Does travel insurance automatically protect passengers?

No.

Most travel insurance will not include what is called "scheduled airline failure insurance", which applies to carriers that fail to fly.

This can be bought separately.

But some policies will stipulate that certain airlines are not covered, should they fail.

What is the time frame for any reimbursement?

This depends on the credit card firm, but they are generally fairly prompt. Claims on a visa debit card must be made within 120 days.

In future, what steps can passengers take to protect themselves?

Larger airlines are more likely to provide better protection than small carriers and are less likely to go bankrupt.

If booking a stand-alone ticket, getting the requisite insurance and paying by credit card is the better option.

But for the most secure option, ATOL-covered package deals will pick up the pieces when things go wrong.

Are there any plans to change the system?

Yes, the European Commission is starting a review in 2010 into protection for those who book holidays on the internet.

Consumers who make up their own packages of flights, hotels and car rentals on one website or partner sites could get more protection.

The Commission wants to consult on the possibility that basic insolvency protection should be extended to cover independent travellers buying stand-alone airline tickets which are not part of any package.



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SEE ALSO
Airline's collapse strands 4,500
17 Dec 09 |  Scotland
Your Flyglobespan experiences
17 Dec 09 |  Scotland
Help plan for stranded travellers
26 Nov 09 |  Business
Airline collapse hits passengers
01 Sep 09 |  Business
Zoom Airlines suspend all flights
28 Aug 08 |  Business

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