After news that one of Europe’s largest tour operators has just gone bust, holidaymakers have been urged to get to grips with their legal rights in case their holiday plans are affected by collapsing travel providers this summer.

Last year, nine airlines filed for bankruptcy as the travel industry still tries to find its feet in the aftermath of Covid.* Making it more important than ever that travellers protect their well-earned holiday and know their rights should the worst happen.

A recent Quotezone survey found 12% of holidaymakers have had their airline or tour operator go bust – 30% of which were protected by their travel insurance, 42% were protected by either ATOL or their credit card company and 12% were left unprotected and out of pocket.

Financial and legal protections differ greatly depending on what has been booked and where the purchase was made, so travel insurance comparison site has provided reminders on the protections offered by ATOL and other relevant regulations.

ATOL (Air Travel Organisers’ Licence) is a financial protection scheme managed by the Civil Aviation Authority (CAA) in the UK. It’s designed to protect consumers who have purchased package holidays or flights from UK-based travel companies in the event that the company ceases trading, or goes ‘bust’.

However, the level of protection varies depending on whether they’ve booked a package holiday or made their own arrangements.

Tiffany Mealiff, travel insurance expert at said: “As the warmer months approach and holiday itineraries are finalised, we wanted to remind UK holidaymakers of their legal rights in case their travel company goes bust.

“With the current financial struggles in the UK, our survey showed 15% of holidaymakers are searching for cheaper deals online and booking with sites and tour operators that aren’t as well-known, to help find savings. It’s crucial for travellers to always look for the ATOL logo and ask the company if they hold an ATOL licence, if they aren’t sure.

“And while ATOL and the package travel regulations provide protections, having comprehensive travel insurance is also sensible. It’s important to check the policy covers insolvency of the travel provider to add an extra layer of security.”

Here are your rights if an airline or travel company goes bust this summer:

  1. Find out if your booking is ATOL protected

ATOL protection applies to most air trips abroad that are booked with UK travel companies.  If you are covered by ATOL, your travel company should have given you an ATOL certificate when you booked.  Under the ATOL scheme, if a firm goes out of business and you can no longer take your trip, your booking will be refunded. If it happens when you are abroad, don’t panic. You will be able to finish your holiday and fly home as you originally planned.

  1. Package holidays

A package holiday is when you book more than one part of your holiday through the same travel agent or website – for example, your hotel and plane tickets.  Fortunately, package holidays have both financial and legal protection, and the Package Travel and Linked Travel Arrangements Regulations 2018 require organisers of package holidays to provide protection for your money and to bring you home if necessary.  This means that all companies selling package holidays must offer the same level of protection. This protection will prevent you from losing money and will also help you sort out any practical problems should they or the airline you’re flying with go bust.

  1. Linked travel arrangements

A linked travel arrangement is when you buy one part of your holiday and then are prompted to buy another part via a click-through within 24 hours. For example, if you buy a flight and then are prompted to purchase car hire through the same website.  Linked travel arrangements aren’t covered by ATOL but they do benefit from other insolvency protections. A linked travel arrangement only has financial protection – and this is at a lower level than if you bought a package holiday. The financial protection provides some cover if the company that arranged your linked travel arrangement goes out of business.  As there is no legal protection covering the whole linked travel arrangement, any complaints about the provision of the services must be directed to the service providers themselves.

  1. Independent travel

The Civil Aviation Regulations 2012 (Air Travel Organisers’ Licensing)  are overseen by the CAA and require tour operators who sell flight-only arrangements to provide protection for your money and to bring you home if necessary. However, this protection does not apply to flights that are bought directly from an airline.  If you book a flight directly with an airline, unfortunately you will not be covered by ATOL. This means that if the airline you booked with goes bust whilst you’re abroad, you will need to book a return flight with another airline.  However, if you’ve scheduled airline failure or end supplier failure insurance added to your travel insurance policy, you should be able to get any additional flight or hotel expenses refunded.

  1. Travel insurance

Not all travel insurance policies include insolvency protection either, so it’s crucial to check the specifics of your policy. Insolvency protection ensures that if your travel provider goes bust, your policy will cover things like refunds for paid expenses, repatriation costs, and alternative travel arrangements. Travel insurance comparison can help holiday makers find real savings, by comparing travel insurance quotes for annual versus single trip policies, there could be savings to be found.  Also review worldwide versus travel insurance for Europe to ensure all your destinations booked throughout the year are accounted for on the cheapest possible policy.

  1. Bookings that have been made with credit cards

If you have paid for your holiday with a credit card, you may have additional protections under Section 75 of the Consumer Credit Act. This legislation makes your credit card issuer jointly liable if something goes wrong, offering another avenue for refunds.

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