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Flight cancellation compensation: what are your rights when airlines go bust?

Ryanair’s flight cancellation incidents over the winter affected thousands and hit the headlines this summer but the recent announcement that Monarch Airlines has gone into administration hit some passengers even harder. Other airlines have also been struggling: both Air Berlin and Alitalia filed for insolvency earlier this year.

Denied Boarding Regulation

If you experience flight cancellation or delay with an EU-based airline or a non-EU based airline flying from an EU airport, the Denied Boarding Regulation offers you some protection, based on your circumstances and the length of your delay.

However, what if the airline you are flying with ceases trading?

The British, German and Italian governments have stepped in to help those affected by the insolvencies of Monarch, Air Berlin and Alitalia respectively. The Civil Aviation Authority, part of the UK Department for Transport, spent £60 million flying stranded holidaymakers home in the UK’s biggest ever peacetime repatriation. The German and Italian governments are providing short-term credit, aiming to keep planes in the sky while negotiations with buyers are ongoing.

ATOL protection for flight cancellation

What about flight cancellation affecting 750,000 of Monarch’s passengers? Many will benefit from ATOL protection (which covers almost all overseas air holidays booked with UK companies) but those with flight-only bookings are not covered. Those passengers may be able to get a refund through their credit or debit card providers but may struggle to reclaim other holiday costs. You might be able to claim on your insurance – but check the terms as many travel insurance policies do not cover airline failure.

Transport Secretary Chris Grayling has indicated that reforms to try and stop another airline collapsing in this way will be considered. In a statement to the House of Commons, he said that government efforts will be focused on whether airlines could, in the future “wind down in an orderly manner and look after their customers themselves without the need for the government to step in”.

If you have been affected by any of the issues raised in this article, please contact Jane Henderson in the Civil Litigation team on 0117 904 5816 or by email at jhenderson@lyonsdavidson.co.uk

 

Posted on Nov 9th, 2017 by Lyons Davidson

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