Your rights if an airline goes bust – how are you protected if an airline fails?

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FlyBMI went into administration on Friday 16th and cancelled all flights. What are your rights if an airline goes bust and how are you protected? Here’s a guide to the rules:

Your rights if an airline goes bust

Your right depend on whether you book your flights directly with the airline in question or through a travel company. If you book your flight as part of a holiday, you are protected. In FlyBMI’s case, it was mainly used for business travel and specialised in flights between European cities.

SAVVY TIP: On Sunday, LoganAir announced it would take over three FlyBMI routes, from Aberdeen to Bristol, to Oslo and to Esbjerg. LoganAir is owned by the same holding company as FlyBMI. However, it would only start flying these routes from March 4th onwards.

If you booked your flight through one of FlyBMI’s partner airlines or an agent, the airline says you should contact them to see ‘what your options are’. However, if you booked your flight directly with FlyBMI, you may be able to claim on your travel insurance or from your credit or debit card company.

SAVVY TIP: See section 1 below for links to articles on claiming under Section 75 or using chargeback.

1. Scheduled flights booked directly with the airline

If you book a scheduled flight directly with an airline, you’re not generally covered by any airline protection scheme if that airline goes bust. A scheduled flight means a flight that the airline sells as part of its regular timetable. The only exception is if you booked with an ATOL registered airline and you received an ATOL certificate when you booked.

However, there are two ways you may be able to protect the cost of your holiday.

  • Pay for your flight by credit card (or pay the deposit by credit card, if you’re given that option). As long as the flight costs more than £100 you will be protected by Section 75 of the Consumer Credit Act. This means that you will be able to claim back the cost of the flights from your credit card provider. You can read more about Understanding your credit card rights under Section 75
  • Take out scheduled airline failure or buy a travel insurance policy that includes scheduled airline failure. You can buy specialist policies that will pay out if your airline fails.

SAVVY TIP: If you pay for your flight using a debit card, you should ask your debit card provider to do a ‘chargeback’, which is essentially a refund of the money you paid. It’s not a legal right like Section 75 is but is something that debit card providers have agreed to do. There’s more information about Getting a refund from your credit or debit card through ‘chargeback’

2. Scheduled flights booked with a travel company

If you book a scheduled flight with a travel company you should be protected by ATOL (Air Travel Organiser’s Licence) if an airline goes bust, as long as you book with an ATOL-registered company.

By law every UK travel company that sells flights and holidays that include flights has to have an ATOL.

SAVVY TIP: Be aware that companies that aren’t based in the UK but that are based in Europe don’t have to have an ATOL if they sell to UK customers. Low Cost Holidays, which went bust in the summer of 2016, had moved its headquarters to Spain so wasn’t covered by the ATOL scheme. You can read more about Your rights if your travel company goes bust in my article.

If you book a flight, plus either car hire, accommodation or both, you will be protected by ATOL if the airline goes bust (in the jargon, what you’ve booked is called ‘flight plus’). If you book a flight on its own with a travel company, you are protected by ATOL as long as you’re not given your tickets straight away.

SAVVY TIP: The holiday company should display the ATOL logo in its brochures, adverts and websites. It’s also required to email or send you an ATOL Certificate explaining how your holiday is protected. You should get the certificate the moment before you book and definitely before you pay any money.

Be aware that some companies claim that they’re ATOL protected when they’re not. The Civil Aviation Authority (which runs the ATOL scheme) has a list of travel websites that say they have ATOL protection, but don’t. You can find the list at the bottom of the page called False ATOL protection warning.

3. Charter flights

If you book a charter flight (which is a flight that’s often only available during peak season to specific destinations), you are covered by the ATOL scheme as long as you buy from a UK-based company that is trading legitimately and has an ATOL. If you buy from a company based outside the UK but in Europe, it doesn’t need an ATOL and some companies claim to have an ATOL when they don’t (see my earlier copy on scheduled airlines).

Claiming on travel insurance

If you have travel insurance and the airline goes bust, your insurer will normally expect you to claim from any protection scheme that’s available (such as ATOL). If you book a flight on its own (i.e. not with car hire or accommodation), make sure your travel insurance has scheduled airline failure cover.

Useful links:

You can read more about what to do if you’re booked on a FlyBMI flight on the CAA website. There’s information about FlyBMI ceasing trading on its own website.

There’s information About ATOL on the Civil Aviation Authority’s website.

Related articles:

Ten tips on getting the right travel insurance policy for less

If you’re booking a holiday, look out for a new ATOL travel protection certificate

Using your EHIC or European Health Insurance Card; what does it give you?