What happens if my airline goes bust?
The airline itself is the one party that will not help. Four recovery routes exist, they apply in a strict order, and which you have was decided when you booked.
- Difficulty
- intermediate
- Time
- 25 min
- Read
- 3 min
- Safety
- caution
Short answer
Work through four routes in order: ATOL protection if it was a package or a flight-plus arrangement, the card route — Section 75 for a credit card purchase over the threshold, chargeback otherwise — scheduled airline failure insurance if your policy has it, and finally a claim in the administration, which rarely pays much. If you are already abroad, check the UK government advice page for that airline first.
Safety
Step by step
- Find out what actually protects the booking.A package holiday including the flight is ATOL protected and the scheme will get you home and refund what you have lost. A flight booked directly with the airline, or with an agent as a flight-only sale, usually is not — check for an ATOL certificate issued at the time of booking.
- If you are abroad, check for a repatriation arrangement.When a UK airline fails with passengers overseas, the Civil Aviation Authority publishes what is happening for that specific failure, including whether repatriation flights are being run and who qualifies. Check that page before booking anything yourself.
- Use the card route for a flight-only booking.If you paid by credit card and the ticket price is within the statutory range, Section 75 makes the card provider jointly liable with the airline for the whole amount, even if only part was paid on the card. If you paid by debit card, or the amount is outside the Section 75 range, ask the bank for a chargeback under the card scheme rules — there are time limits on chargeback so act quickly.
- Check your travel insurance for scheduled airline failure cover.It is not standard. Some policies include end supplier failure or scheduled airline failure insurance, sometimes as an add-on. Read the wording — this is exactly the risk it was designed for.
- Rebook realistically.Prices on the route usually rise immediately. If you have to buy a replacement flight, keep the receipt: it may be recoverable under insurance failure cover, and it may be part of what a card claim covers.
- Register with the administrator.You are an unsecured creditor. Register the claim because it costs nothing, but do not wait for it — unsecured creditors of a failed airline typically recover little or nothing, and years later.
- Do not cancel the card payment before checking.Speak to the card provider about the right route rather than initiating a chargeback that could conflict with a Section 75 claim. They will tell you which they will handle.
Alternatives
- Book as a package next time: A package including a flight carries ATOL protection, which repatriates you and refunds you, and imposes obligations on the organiser that a flight-only booking does not. It is the strongest protection available.
- Pay by credit card: Section 75 makes the card provider jointly liable for a purchase within the statutory value range, which is the single most useful protection for a flight-only booking.
- Add supplier failure cover to the policy: Where a package is not practical, an insurance policy that includes scheduled airline failure fills the same gap for a modest premium.
Questions people ask
Will another airline honour my ticket?
Occasionally airlines offer rescue fares to stranded passengers of a failed competitor, but there is no obligation and the fares are usually discounted rather than free.
Does a travel agent booking help?
It depends on how the agent sold it. If it was sold as a package or a linked travel arrangement with an ATOL certificate, yes. If it was sold as an agent for the airline, the contract is with the airline and the protection is not automatic.
What about hotels and car hire booked separately?
They are separate contracts, unaffected by the airline failure, and generally not refundable because of it. That is one of the practical arguments for booking as a package.