The rights of an air traveller when an airline has gone bust vary. In general, their rights will depend on how the flight was booked.

Bookings made through a tour operator or travel firm

Tour operators and travel firms who sell package holidays in the UK are legally required to hold an ATOL (Air Travel Organisers Licence). A list of tour operators and travel firms who hold an ATOL can be found on the Civil Aviation Authority’s website.

Package holidays and the responsibilities of tour operators and travel firms

If the flight was booked through a tour operator or travel firm as part of a “Package Holiday” you will probably be covered by the ATOL scheme.

A Package Holiday is a holiday consisting of 2 or more components, for example flights to and from the destination and hotel accommodation at the destination.

If you booked a package holiday through a tour operator or travel firm then the tour operator or travel firm will be responsible for ensuring that you are able to get home and for making the necessary arrangements if the airline has gone bust at no additional cost to you. 

If you are covered by the ATOL scheme you should have been informed of this when you placed the booking and after you paid you should have been provided with an ATOL Confirmation invoice. It is important to take the ATOL Confirmation invoice with you on holiday in case you require assistance under the ATOL scheme while you are away.

Purchase of flight only

If you purchased a scheduled flight only through a tour operator or travel firm you may or may not be covered by the ATOL scheme. If you are covered by you should have received an ATOL Confirmation invoice when you paid for the flight. However, if you received the ticket immediately after you paid for the flight or within 24 hours you probably won’t be covered by the ATOL scheme.

What if I have ATOL protection but the tour operator or travel firm has gone bust? Who gets me home then?

If you are covered by the ATOL scheme and your tour operator or travel firm goes bust the Civil Aviation Authority will make the arrangements for you to travel home and cover the cost of such arrangements. Normally you will be able to return home on the date originally planned and will be able to fly to the same airport as planned. However, where the Civil Aviation Authority is unable to arrange for this then they will also cover the cost of the additional arrangements.

What if I am not covered by the ATOL scheme?

If you paid for the flight by credit card and the flight cost over £100 you may be able to obtain a refund from your credit card company. A credit card company will generally only refund the cost of the unused flight and it is unlikely that you will receive compensation for any additional expenses you may have incurred. 

If you took out travel insurance you may be able to make a claim under your travel insurance policy, although many policies do not cover this type of eventuality. If your travel insurance policy does cover you for this type of eventuality you should keep receipts for any out of pocket expenses you incur. Insurers will generally only provide reimbursement for expenses which they consider to have been reasonably incurred. 

When a company goes bust an administrator or liquidator will be appointed and you may be able to claim the price you paid for the unused flight from them. However, the success of any such claim will depend upon whether the failed airline has any funds out of which you can be paid.

Bookings made direct with an airline

If the flight was booked direct with the airline you will not be covered by ATOL. You will, therefore, be responsible for making the arrangements to get yourself home. You will have to pay the cost of the return flight yourself together with any additional expenses you may incur, such as any additional accommodation required. Some airlines offer discounts to passengers who have booked onto a flight with a failed airline and this is something worth checking when placing a booking for a flight home. 

When a company goes bust an administrator or liquidator will be appointed and you may be able to claim the price you paid for the unused flight from them. However, whether such a claim is successful will depend upon whether the failed airline has any funds out of which you can be paid. 

If you paid for the flight by credit card and the flight cost over £100 you may be able to obtain a refund from your credit card company of the cost of the unused flight although they are unlikely to compensate you for any additional expenses you may have incurred. 

If you took out travel insurance you may be able to make a claim under your travel insurance policy, although many policies do not cover this type of eventuality. If you do have insurance cover it is important to keep receipts for any out of pocket expenses you incur. Any expenses claimed which are not reasonable will generally not be recoverable under an insurance policy.