Your rights if an airline or travel company goes bust

Your rights if an airline or travel company goes bustIf your travel company goes bust, it can be a frustrating and stressful experience, but there are some steps you can take to minimise the impact.

You should check if your travel company was a member of a protection scheme, such as the Air Travel Organisers’ Licensing (ATOL) scheme in the UK, or a similar program in your country.

These schemes provide financial protection to consumers in the event of the travel company’s insolvency. If your travel company was a member of such a scheme, you should contact the scheme directly to make a claim. Be prepared to provide evidence of your booking and payment.

If your travel company was not a member of a protection scheme, you should check your travel insurance policy to see if it covers insolvency. Some policies include this type of coverage, and you may be able to make a claim.

Alternatively, if you paid for your booking with a credit card, you may be able to claim a refund from your credit card provider under section 75 of the Consumer Credit Act.

You should contact your credit card provider as soon as possible to find out if this is an option. Finally, you should keep any documentation related to your booking, including receipts, confirmation emails, and booking references, as this will be useful if you need to make a claim

Find out whether your booking will go ahead

Are you eager to embark on a long-awaited journey but worried about your travel company going under? Fret not, because there are several steps you can take to ensure your plans remain intact. Firstly, it’s always a good idea to reach out to your travel company directly to confirm that your booking is confirmed. But, what if they’re unresponsive? Don’t panic – simply reach out to your tour operator, or flight and accommodation provider to verify that your booking is still in place.

Assuming everything checks out and your booking is still valid, you’re free to continue with your travel plans as usual. Remember to keep a detailed record of all correspondence and booking information for future reference.

But if things don’t go as smoothly, don’t worry – help is at hand. If you need guidance or support, the ABTA claims enquiries office is there to offer valuable advice and assistance.

So, stay calm and remember that there are always options available to ensure your travel plans go ahead as planned.

Top tip: check with multiple companies

It’s usually smart to check in multiple places to see if your booking may still be made in the event that a travel agency goes into insolvency  or company goes out of business.

  • In the event that your travel agency fails, get in touch with your tour operator, lodging provider, and/or airline.
  • Contact your travel agent for assistance if you made your reservation through one and your tour operator fails to operate.
  • You might be able to file a financial claim if you made a reservation with a firm that has closed its doors and was an ABTA Member

Find out if your booking is covered

Most international flights that are booked with UK travel agencies are covered by ATL protection. Your travel agency ought to have provided you with an Atol certificate when you made your reservation if you are insured by Atol.

If you are unsure, read our tutorial on how to determine whether your holiday is Atol protected.

Package holidays

The Package Travel and Connected Travel Arrangements Regulations of 2018 mandate that tour operators who offer package vacations safeguard your funds and, if required, transport you back home.

  • When you reserve multiple trip components from the same travel agency or online, the vacation is referred to as a package.

Your money will be safeguarded if the business with whom you made either of these reservations is a participant in the Air Travel Organisers’ Licensing (Atol) scheme.

Linked Travel Arrangements

  • When you purchase one portion of your vacation and are then prompted to purchase another portion via a click-through within 24 hours, this is known as a linked travel arrangement.

Although Linked Travel Arrangements are not protected by Atol, they do have additional insolvency safeguards.

Will my package holiday still be covered after Brexit?

Unless the government decides to modify the legislation in the future, you will continue to have the same rights and safeguards when booking a package vacation after Brexit.

How to make an Atol claim

You might be qualified to submit a claim under the plan if:

  • You have made travel arrangements for a future trip, but the Atol holder has since ceased operations.
  • When you are travelling, the Atol holder ceased operating, which has caused your itinerary to change or caused your return flight to the UK to be cancelled.

Make an Atol claim for a future booking

If you received an Atol Certificate when you made your reservation, carefully read it as it outlines who is securing your travel and what you should do.

When filling out a claim form, you must determine the sort of ATOL-protected trip you were scheduled on.

What information the CAA needs to repay you will be explained in the material it publishes on the failed Atol holder.

You won’t lose out as long as your trip is protected because the CAA will always try to reimburse you for any Atol-protected portions of your vacation that you don’t use.

Make an Atol claim if you’re currently abroad

If you received an Atol Certificate when you made your reservation, carefully read it as it outlines who is securing your travel and what you should do.

The CAA will take all reasonable measures to guarantee that you can continue and enjoy your trip uninterrupted.

On the CAA’s Recent Atol Holder Failures website, you can find information outlining the procedures that will be put in place to help you finish your trip and fly home.

For more information, you should choose the pertinent failing Atol holder.

Call the CAA at +44 (0) 333 103 6350 if you run into any problems while travelling. They will go over your options and the scenario.

Flight-only arrangements

The CAA is in charge of enforcing the Civil Aviation (Air Travel Organisers’ Licence) Regulations 2012, which mandate that tour operators that sell flight-only packages safeguard your money and bring you home if required.

Direct plane ticket purchases are not covered by this protection.

Not usually are flight-only bookings made through a travel agent protected by the Atol programme. To always inquire.

Most ABTA Members will be able to acquire protection using a suitable insurance policy where travel arrangements aren’t already covered.

Preserve the proof. Obtaining and preserving all pertinent documentation is crucial if there is a money protection programme in place so that you can submit a claim if necessary.

Section 75 protection

Section 75 protection is a legal safeguard available to consumers in the UK who make purchases using a credit card. This protection is provided under the Consumer Credit Act and applies when a consumer makes a purchase with a credit card for goods or services valued between £100 and £30,000.

If the goods or services purchased are faulty, not delivered, or if the company providing them goes bust, the consumer may be able to claim a refund from the credit card provider.

This means that if a consumer books a holiday using a credit card and the travel company goes bust, they may be able to claim a refund from their credit card provider for the cost of the holiday. Section 75 protection can provide valuable peace of mind for consumers making high-value purchases, as it offers an additional layer of protection in case something goes wrong with the transaction

Chargeback scheme

If you’ve paid for a product or service using a debit card, you may be eligible to make a claim through the Mastercard and Visa Chargeback scheme. This scheme is not a legal requirement, but is a voluntary service offered by most banks and card issuers. It allows consumers to request that their bank reverse a transaction in certain circumstances, such as if a company goes bust or if goods are not delivered.

The Chargeback scheme can be used for purchases made using both Mastercard and Visa debit cards. However, it’s important to note that the scheme does not offer the same level of protection as Section 75 of the Consumer Credit Act, which is only available for credit card purchases. As such, it’s recommended that consumers use a credit card for high-value purchases whenever possible, to ensure they are fully protected in case of any issues.

Travel insurance

Make touch with your travel insurance provider as well.

Not all travel insurance plans will protect you if a travel agency goes out of business.

Make sure you read the policy’s fine print twice to be sure end-supplier failure is covered. This should protect you in the event that businesses you’ve booked with, like your airline, vehicle rental agency, or lodging provider, collapse.


It is crucial to know whether your booking is protected if your holiday company goes bust. Booking a holiday involves a significant financial investment, and if your travel company goes under, you could potentially lose all the money you have paid for your trip.

However, if your booking is protected, you may be able to recover some or all of the money you have paid. Protection schemes such as ATOL in the UK, which applies to package holidays, and the ABTA bonding scheme, which covers a wider range of travel arrangements, offer financial protection to consumers in case their travel company goes bust.

Insolvency & Restructuring Expert at Business Insolvency Helpline | + posts

With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.