• Sat. Apr 13th, 2024

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Insurance warning for holidaymakers as airline finances face turbulence

With the Easter holiday season fast approaching, UK travellers planning to jet off overseas are being advised by insolvency and restructuring trade body R3 to check that their travel insurance will cover them if the airline they’re flying with becomes insolvent.

The warning follows the recent forced sale of troubled regional airline Flybe, and the insolvency of airline Flybmi, which left hundreds of holidaymakers stranded and many more in doubt over future vacation plans.

Andrew Haslam, chair of R3 in the North East and head of specialist business advisory firm FRP Advisory LLP’s Newcastle office, explains: “Although the vast majority of travellers take out holiday insurance, they might not have what is called ’scheduled airline failure cover’, which protects the holder if their carrier goes into administration.

“With the European airline sector in a state of flux, it is more important than ever for travellers to check whether they have this cover prior to flying or, ideally, when researching and buying their travel insurance policy.”

According to R3, there is a safety net against airline failure for those travellers booking flights as part of a package holiday, or purchasing flights with a credit card.

Andrew Haslam continues: “If holidaymakers have bought flights and accommodation from a travel company which is a member of the Air Travel Organiser’s Licence scheme – ATOL – then they should automatically be covered against airline insolvency, although it’s worth noting that the ATOL scheme does not cover flights which are booked separately.

“There should also be some protection offered by paying for flights with a credit card, but this should be checked out prior to travel with the card issuer.

“Without doubt, an airline’s insolvency can have a huge effect on even the best-laid holiday plans. However, if the right checks are made before travelling, a dream getaway is far less likely to be derailed.”