Airline insolvency

Airline insolvency – What you need to know

When an airline collapses, it can leave travellers stranded and unsure of their rights. This guide explains what airline insolvency means and what you can do if your airline stops trading.

What is insolvency?

Insolvency is when a company is in serious financial trouble and cannot pay the money it owes. This can happen when its costs are higher than its assets, or when it does not have enough cash to pay its debts on time.

If an airline becomes insolvent, it may stop operating altogether. Some airlines try to keep flying while they work through financial problems, but this is not guaranteed.

If your airline becomes insolvent or stops trading

Your legal rights always lie with the airline you booked your flight with. Once an airline becomes insolvent, getting your money back can become very difficult.

You should still try to request a refund, but you will need to check for updates regularly.

Keep looking at the airline’s website. If a liquidator is appointed to handle the company’s closure, you may need to register as an affected customer.

It is also helpful to check the Civil Aviation Authority (CAA) website for the latest information. They often publish updates and guidance for passengers.

If the airline has completely stopped trading, the company no longer exists. This means there is no longer a business you can claim money back from directly.

Other ways you might get your money back

Even if you cannot recover the cost from the airline, you may still have other options.

If you paid by credit card and meet the conditions, you may be able to claim under Section 75 of the Consumer Credit Act. Debit card payments may be covered by Chargeback. Your bank or card provider can explain whether you are eligible.

See more information on Section 75 and Chargebacks here

Package holidays

If your flight was part of a package holiday, you may be protected under package travel rules, which can cover airline failure.

Find out more information on package holidays here

Travel insurance

Some travel insurance policies include cover for airline insolvency. This depends on your policy, so you should check the terms or contact your provider.