Protecting yourself against airline bankruptcies

With the recent XL Airways collapse, travellers are anxious about the prospect of additional failures and being stranded on holiday overseas and possibly out-of-pocket.

Nearly 80,000 XL passengers were marooned abroad when the airline’s fleet was grounded, and another 200,000 had holiday bookings cancelled.

More than 150 emergency flights, many organized by the CAA, have repatriated most of the stranded holidaymakers. Upwards of 10,000, however, will find themselves out-of-pocket following the bankruptcy, with no refunds available to them.

The lack of financial protection for consumers has prompted advice to passengers from industry groups, and a number of operators are suggesting that a few simple precautions can take the anxiety out of holiday planning, and offer complete protection against tour company or airline failure.

The best protection of all is offered when consumers book through travel operators that are members of the Civil Aviation Authority (CAA) Air Travel Organisers’ Licensing (ATOL) scheme, entitling them to full compensation in the event of bankruptcy.

What this means is that anyone already abroad on holiday will be assisted in making alternate arrangements, at no charge, and that hotel and travel companies providing assistance will be paid directly for their services by the CAA.

Industry experts warn, however, that not everyone will be protected by the ATOL scheme. Anyone booking a holiday with an operator not fully-bonded by the Association of British Travel Agents (ABTA).

www.xl.com