AA Legal Documents
Law guide

Financial protection


If you are holding a ticket on an airline that has gone bankrupt and ceased flying, your money may be protected depending on a number of factors. If your flight is part of a package holiday, your money is protected by law under the Civil Aviation Authority (CAA)'s Air Travel Organiser Licensing (ATOL) scheme. This scheme also provides financial protection for seat-only travel on charter airlines, and in some circumstances, for flights with scheduled airlines (see below heading 'Scheduled flights (flight only)'). It also covers you if the tour operator or travel agent fails before handing your money over to the airline.

For more information, see our 'Consumer bodies for holiday complaints' section.

Scheduled flights (flight only)

For flight-only tickets with scheduled airlines, the protection arrangements are rather confusing. They depend on where you buy your ticket and when the ticket is issued.

If you buy your ticket direct from an airline, there is no ATOL protection. Nor does the airline need to make any arrangements to protect your money. Unless you have made your own arrangements (see below), you will have lost your money if the airline fails. (At the time of writing, there is no scheme or legislation under which another airline can be obliged to carry you).

If you buy from a travel agent and you get your ticket immediately or within 24 hours of payment, this transaction is not covered by ATOL. If the airline fails, you will be in the same situation as if you had bought your ticket from the airline itself (see above).

If you buy from a travel agent and you do not get your ticket immediately or within 24 hours, the agent must provide you with a document which must tell you either:

  • the name of the company that has given a legal undertaking to the CAA that it has made arrangements to protect passengers' money in the event of scheduled airline failure; or
  • that the agent has arranged separate scheduled airline failure insurance, the cost of which has been added to the fare; or
  • that no arrangements have been made to protect your money against failure of the airline.
Arranging your own financial protection

If your ticket money is not otherwise protected, you can

  • make sure that your travel insurance policy includes cover for scheduled airline failure (some policies do, many do not), or
  • buy your ticket with a credit card; you will be able to claim under the terms of the Consumer Credit Act provided the transaction came to more than £100. This protection does not apply to debit cards such as Switch or Delta - a point to bear in mind if you are planning to avoid the credit fee charged by some airlines. (Your money may be protected even if the cost of your travel was less than £100 - check with your credit card company.)
None of the above

If your money is not protected in any of the ways detailed above, you will be one of the unsecured creditors of the bankrupt company. You will need to contact the bankruptcy administrators to register your interest in receiving your share of any money that is left after the secured creditors have been paid. You should be able to get contact details of the administrator handling the case from The Insolvency Service website or general enquiry line: 0845 602 9848 in England and Wales or from the DETI Insolvency Service website or general enquiry line 028 902 51441 in Northern Ireland.

What if you are already abroad?

Some airlines offer "repatriation fares" for stranded passengers. These are usually available only by phoning the airline direct. If you are looking for these fares, it is worth keeping in touch with the news, or logging onto this, or other websites, to find out which airlines are offering repatriation fares on what routes.