What to do when your airline goes bankrupt?

Airline bankruptcies.

It’s not something you think about too much, isn’t it?

Airlines don’t go bust every week or even month. But it does happen from time to time. And as recent events with Thomas Cook reminded us once again, it can happen also very sudden. That’s why it’s a good thing to know your rights, and to know what to do when that happens to you.

What to do when your airline goes bankrupt? What can you expect?

Because bad stuff happens, even before or during our holidays. You can’t predict if it will happen to you and your family, and affect your holiday. Usually we don’t think it will happen to us, but sometimes it does.

Here are a few of the most important things you should know about airline bankruptcies.

Bankruptcy sign

What to do if your airline goes bankrupt

So, you’ve heard the horrifying news - your airline has gone bust all of a sudden.

Just like it was with Thomas Cook, which ceased operations on 23rd September, 2019.

What to do if your airline goes bankrupt?

And more importantly - if an airline goes bankrupt - do you get your money back?

1. If your holiday hasn’t yet started

If an airline goes bankrupt before your holiday, you have two options.

You can cancel your holiday. Or buy a new flight.

If you have purchased a travel insurance, you can buy a new ticket and make a claim with your insurance company. Most likely you will be reimbursed for your initial expenses. So you can still go on a holiday without losing much money due to flight cancellation.

If your holiday is expected to start in a month or less, buy the new flight as soon as possible. As it’s less likely to get any cheaper anymore. If you have a connecting flight, contact the airline from which you booked the flight, to make sure what's happening with the other flight.

2. If you’re already on holiday

What happens if an airline goes bust during your holiday?

First of all, check the airline’s website.

Most airlines will leave an update, and it may contain certain information:

  • Refunds (if any). And how to get them.
  • Tickets. What will happen to the tickets the airline has sold. In most cases the tickets become worthless after the bankruptcy.
  • Assistance. Will there be assistance for passengers stranded abroad? Will some other airline come to the aid of stranded passengers and help bring them back home?
  • Government assistance. Will government help the stranded passengers?
  • Scheduled flights. Will another airline cooperate and carry out scheduled flights of the airline which is no longer in operation?

Next, if your airline ceases operations during your holiday and you are stranded in your holiday destination, contact your embassy for the instructions. And continue checking the website of your airline for possible new updates.

If you have a travel insurance you may get compensated for the extra expenses.

Contact your insurer to determine the next steps.

Unhappy drawn face

Can you get a compensation

No, unfortunately you can’t. Not from the airline.

If we speak globally, you should consider yourself lucky if you get a refund.

The airline ceased operations, and it is in debt. The situation is difficult enough for the airline, and the passenger rights is the last thing on the list. As the airline has stopped operating, there’s also no one to review all the compensation claims.

Having a good travel insurance may help, though.

Many of the best travel debit cards come with an insurance.

Can you get a full refund for your airline ticket

You may get compensated for your ticket by the airline.

But it’s not a norm.

In fact, it’s highly unlikely that you will get a refund from the airline.

For example, when Transaero, a Russian airline, ceased its operations, it offered a full refund for the airline tickets, even a full refund on non-refundable flights. But, as already mentioned, it’s not a common practice.

In most cases you’ll need to seek alternate flight arrangements.

Sometimes a discount might be offered.

When WOW Air went bankrupt in 2019 and their flights got cancelled, the airline offered to rebook with other airlines offering lower rates referred to as “rescue fares”.

However, you may get a refund if you booked your flight with a credit card.

Or if you have a travel insurance covering bankruptcies.

More on this below.

Question mark

How to protect yourself if your travel company goes bankrupt

1. Book the tickets with a credit card

Many credit cards automatically carry travel insurance, and the travel insurance will provide compensation if your trip is disrupted. That also applies to airline bankruptcies.

However, you must file a complaint as soon as the future of the airline is known.

File a claim as soon as your airline stops operations and cancels your flight.


Because there’s a time frame when you can file a complaint.

Don’t expect to receive money in your bank account immediately.

2. Get yourself a travel insurance

If you have a credit card, most probably you already have a travel insurance.

Or if you have a reputable travellers debit card.

Check with your bank, as conditions may apply.

But if you don’t have a credit card, or you simply haven’t booked your flight with one, it’s a good idea to get yourself a travel insurance. It's important to get a travel insurance which covers airline failures. Not all travel insurance policies will cover that.

When you get yourself a travel insurance, don't forget that it has other benefits.

You may be compensated for lost luggage, missed flights, missed self connecting flights. Also you may get compensated for lost or stolen electronics and documents, as well as stolen money.

Before buying a travel insurance check the terms and conditions.

Because not all travel insurance policies are created equal.

Even though they may look identical at first glance.

A blank page and a pencil

Airline bankruptcy: UK air passenger rights

If you have booked a package holiday with a UK travel company that has gone bankrupt (example, Thomas Cook), we have good news — you may be protected.

Even if you don’t have a travel insurance.

In the UK package holidays are covered by ATOL, which stands for Air Travel Organiser's Licence.

All UK travel companies that sell package holidays are required to hold an ATOL certificate.

ATOL does not apply to holidays or flights booked directly with airlines or to flight-only bookings through a travel agent.

Read more about ATOL here.

Save this guide for later, and you’ll always be prepared.

Safe travels!