Times are tough and unforgiving for the air industry, with high street giant Thomas Cook the latest to have sadly gone bump.
The repercussions of this insolvency are huge; over 20,000 jobs have instantly been lost, flight cancellations have ruined the plans of roughly one million holidaymakers and the largest ever repatriation exercise called “Operation Matterhorn” is due to take place, which is set to cost UK taxpayers up to £600 million.
Travel journalist Simon Calder has commented on the whole sorry affair, stating, “Thomas Cook was the pioneer of organised travel, beginning with a Temperance outing from Leicester to Loughborough in 1841. But scale and a strong brand proved no guarantee of enduring success in travel.”
With Thomas Cook entering into compulsory liquidation, what are the rights of passengers whose flights have been cancelled?
There isn’t a definitive answer to this, as it often depends who you booked your holiday with, whether you were ATOL-protected, how you paid and if you took out a travel insurance policy.
Did you know that whenever you purchase anything with a credit card above the sum of £100, your provider is legally jointly liable to provide the service that you paid for? All of the details are outlined in Section 75 of The Consumer Credit Act 1974.
Many passengers still don’t realise that if they booked a flight using a credit card directly with the airline (and paid over £100 for the ticket), they can be paid back in full, under section 75 of the Consumer Credit Act 1974.
Below are some tips on what your rights are if you are affected.
The Importance Of ATOL (Air Travel Organiser’s License) Protection
We have good news for any passengers that booked a package holiday through a UK travel agent, as all firms selling air travel holidays are legally bound to hold an ATOL protection scheme. ATOL is run by the Civil Aviation Authority (CAA), so they will be responsible for getting you home if you are left stranded abroad due to an airline collapse. The scheme is funded by travel agents, who pay £2.50 for each person that books a trip through them.
Travelling under the protection of a package deal is less risky than being a “DIY” holidaymaker, i.e. arranging all of your flights and hotels yourself.
Regarding the latest sting to the world of aviation, the CAA advises any passengers due to travel with Thomas Cook that they may be able to claim against their card provider – and to expect to be asked to write a negative response letter confirming the position.
Travelling under the protection of a package deal is less risky than being a “DIY” holidaymaker, i.e. arranging all of your flights and hotels yourself. Although the element of freedom with this option may be tempting, you are less safe financially if your airline does go bust – as seen in May 2008 when business class airline Silverjet filed for administration, leaving passengers who had arranged their own flights forking out for extortionate fares home from long haul destinations like New York.
If your flight has been cancelled under these circumstances, apply to the CAA for a refund.
Travel Insurance Doesn’t Necessarily Cover For Airline Failure
If your travel plans have been ruined due to an airline ceasing trading, it’s reasonable to assume that your travel insurance has you covered and you will be reimbursed. But unfortunately, travel insurance providers do not list airline failure on their policies.
Scheduled Airline Failure Insurance (SAFI) can go a long way in protecting passengers in the event of airline failure. Georgie Frost, head of consumer affairs at GoCompare says: “If you take out scheduled airline failure insurance, you’ll receive up to a specified amount per person for any irrecoverable flight costs if the airline goes bust before your trip, or while you’re already away.”
Top Tip: Always Book Your Flights With A Credit Card – And Remember All About Section 75 Of The Consumer Credit Act 1974
Did you know that whenever you purchase anything with a credit card above the sum of £100, your provider is legally jointly liable to provide the service that you paid for? All of the details are outlined in Section 75 of The Consumer Credit Act 1974.
When Monarch Airlines ceased operations in October 2017, many passengers fell foul of the disaster, having booked either with a debit card, or not directly through the airline. If you do find yourself stuck having booked air travel with a debit card, check with your bank whether it is signed up to the “chargeback” procedure, which provides protection on faulty goods; Visa, Mastercard and Amex are all providers of the scheme, so it is definitely worth checking out.
The moral of the story is to never ever book flights with a debit card if possible – it has left passengers high and dry too many times before.