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Are you protected if your airline goes bust?

May 7, 2010 by admin  
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Over the past couple of years the news has been filled with stories about airlines and holiday firms going bust, and whereas in the past many people would simply book the cheapest airline or holiday it has now become necessary to consider whether the airline or holiday company will survive as long as your holiday.

Many people over the past couple of years have lost their holidays or found themselves stranded somewhere abroad, but because of issues with laws they have been unable to claim anything back for their losses and troubles.

Many officials and consumers have expressed concern that consumer protection laws relating to holidays and airlines are very outdated, as the protection that they offer relates to package holidays. Thirty or forty years ago most people booked package holidays because this was the main option available to them, and these consumer protection laws offering them the protection that they needed. However, with the vast choice available today and the power of the Internet at their fingertips many of today’s holidaymakers prefer to book a flight and hotel themselves, as it means that they enjoy flexibility as well as being able to hunt around for the best prices.

Over the past two year along over sixty airlines and holiday companies have gone bust, and for many people this has meant losing their holiday or even finding themselves stranded abroad and unable to get home. Because the consumer protection laws do not cover many of these holidaymakers they have been unable to claim compensation for this situation, and have lost out.

One MP said he was concerned that many people were unaware that they were not covered by consumer protection laws, and with less than forty percent of holidaymakers now booking package deals it was vital that consumers were made aware of the situation.

He said: ‘There is a whole class of holidaymakers who have absolutely no protection under ATOL, but if you asked them, they would not know,’ says Peter Bone, Conservative MP for Wellingborough, who has a background in the travel industry. ‘The system worked 40 years ago when we all went on package holidays. There is a gaping hole in consumer protection. It would be so much better if we all paid a levy of £1 on a flight, so we can build up a fund that could compensate travellers for failure. The current situation is crazy.’

There are a number of steps that consumers can take to try and ensure that they are protected in the event of their airline going bust or their holiday company collapsing. Booking with a credit card is advisable, as the Consumer Credit Act means that you can usually get your money back is something goes wrong if you have booked via your credit card. It is also worth checking with your company to check whether you are covered for airline failure. You should also make sure that even if the website that you are booking through claims that the company offers ATOL protection you still check whether you will be covered if the company goes bust, as this is not always the case.

Tags: Air Travel Organisers' Licensing, Package holiday, travel, airline going bust, airline, airline failure, travel industry, travel insurance

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