Articles Comments

Debt Relief – Insolvency – Bankruptcy Information » Insolvency » Air Company Insolvencies ? Are You Protected?

Air Company Insolvencies ? Are You Protected?

Despite the summer holiday season being over in the UK, many British citizens will be thinking how their holidays managed to go ahead at all. The collapse of several holiday companies in August 2010 left holiday makers, both at home and abroad, concerned about the fate of their holidays. Since September 2009 around 20 holidays had fallen into administration according to the Civil Aviation Authority (CAA) – the UK’s specialist aviation regulator. Not only that but the Icelandic volcano “Eyjafjallajokull” caused huge havoc as the aviation industry in the UK stood to a standstill over the April period. Holiday makers are now more aware than ever of the problems that could affect their holidays – so just how protected are you as a consumer?

In the UK air travel companies are required to hold the “Air Travel Organiser’s Licence” (ATOL); a licence that is managed by the CAA. ATOL is a financial guarantee that provides the funds to protect customers should an airline company fail. ATOL primarily covers air travel however it can extend to holiday accommodation if bought as part of a package. The level of ATOL protection is dictated by your travel company so your first move should be to check your invoice for the ATOL logo and read the terms of the ATOL agreement to find out the level of financial protection you have.

UK based airlines are not protected by ATOL. Insurance and the nature of the insolvency usually dictate the level of compensation you will get from airline insolvency. Airline operators that offer “flights+hotel” are mostly not protected by ATOL unless they have an agreement with an air travel company. So what level of protection is in place for airlines? In the event of delays and cancellations, European law requires airlines to organise alternative flights and to offer reimbursement for refreshments, communications and accommodation in the event of prolonged delays and overnight stays. However the same coverage does not extend to airline insolvencies.

]]>

So what cover do you have if an airline goes bust? If you paid for your trip by using a credit card and the payment was over £100 then you are protected by the UK Consumer Credit Act. This gives you the ability to cancel the payment going to the airline via your accredited bank. In addition some travel insurance companies offer airline insolvency protection – this is subject to the terms of the insurance so it is important to keep an eye out and check with your insurer.

As previously mentioned ATOL does not cover additional bookings that are made outside of the package holiday. DIY holidays that may appear cheaper also offer far less protection than package holidays. Any additional features with companies that are not covered by ATOL are subject to the companies’ own cancellation procedure. If you have organised any equipment hire, additional accommodation, travel money or even airport car parking (regardless of whether it was Gatwick North Airport Parking or hotel parking) then all of these holiday extras are subject to their own cancellation and refunds procedures. This uncertainty has led to some companies offering additional waiver policies that allow consumers to receive conditional refunds should their travel plans be disturbed. For example Park and Go, a UK based airport car parking company, offers customers a £1.99-2.99 waiver option that gives customers the ability to cancel their car parking up to time the parking is due giving customers a full refund (minus the waiver). It is important to review cancellation procedures as some hotels and services do charge clients for last minute cancellations and even for not using their services.

The key point is not to panic if you hear rumblings of insolvency – always make sure you have the right kind of protection in terms of insurance and you can’t really go wrong. Here is a list of key points to consider when booking your next holiday:

If buying flight+hotel deals then make sure you check the coverage of the ATOL protection – ensure you get an ATOL confirmation invoice and look out for ATOL receipt containing the name and ATOL number of the ATOL holder your booking is with. This will ensure that your payment is not at risk if the travel agent stops trading.
If there is no reference to an ATOL holder check that the agent/airline was a member of the Association of British Travel Agents (ABTA), Travel Trust Association (TTA) or the Global Travel Group; then contact that organisation.
Book the adequate travel insurance – make sure your insurance covers airline insolvency and any possible indirect loss.
Pay by credit card – however remember you have to pay more than £100 and you won’t be covered for any indirect loss as a consequence (e.g. accommodation if booked with non-ATOL supplier).
Check cancelation terms of your suppliers – suppliers that offer waivers upfront could save you money in the event of an issue or short notice cancellations.
Check the CAA website for more information on air travel companies and advice on ATOL applications 1– http://www.caa.co.uk or call the Consumer Direct on 08454 040506.

Malcolm is a big fan of holidays and not such a big fan of hanging around in Airports. So if there is anything that is going to improve the lives of UK travellers Mike will write about it. Mike currently works for Park and Go – a secure online booking agency for Airport Car Parking at Major Airports across the UK – from Bristol Airport Car Parking to Gatwick North Parking.

RELATED POSTS:

  1. 4R Business Recovery – Company Liquidation, Company Insolvency 4R Business Recovery is the UK’s leading company insolvency and company liquidation advice service. This video provides a brief...

  2. Car accident legal help please? Hello, Last night I was driving in downtown D.C. looking for parking with my girlfriend. We had pre-purchased tickets to...

  3. United Airlines Not Filing for Bankruptcy At 11 am, Headlines Cross of UAL Filing for Chapter 11; At 11:06, Shares Halted, and UAL Denies News;...

  4. Re-using a company name after insolvency Re using a company name after insolvency It was historically a problem for businesses doing business with others, that they...

  5. What does it mean if your company is insolvent As the title here suggests, you need to establish whether your company is insolvent if you wish to close it...

Written by

Filed under: Insolvency · Tags: , ,

Leave a Reply

Connect with Facebook

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Not finding what you're looking for?
Do a custom search of our entire site:

Get Adobe Flash player