With Spirit Airlines ceasing operations over the weekend and Ryanair boss Michael O’Leary warning two or three European airlines could go bust by this winter, many travellers are understandably concerned about booking flights.
While under typical circumstances airlines have to refund or rebook you onto another flight following a cancellation, in the case of bankruptcy, the carrier ceases to exist so there’s no one to actually do that for you.
Thankfully, Spirit Airlines customers have been told that refunds for upcoming flights will automatically be refunded – but that isn’t always the case.
For example, when Icelandic low-cost airline WOW Air ceased operations in 2019, the carrier advised passengers to first attempt to make a claim through their credit card company or travel insurance.
If you need some peace of mind before hitting pay on a flight, here’s what you can do if an airline you’ve booked with collapses.
Credit card chargeback
If you booked flights using your credit card, you should be able to initiate a chargeback with the provider of your card on the basis that the supplier, in this case the airline, did not provide the service you paid for.
The same cannot generally be said for purchases made on a debit card, but rules do vary from country to country.
For example, a 2020 European Commission report into chargeback in the EU/EEA notes that consumers in Denmark and Portugal may be able to file a claim on their debit card.
Travel insurance coverage
If you booked travel insurance ahead of your trip, it’s worth checking your policy to see if it includes “scheduled airline failure insurance” or “end supplier failure insurance”.
This isn’t typically provided as standard, but you may be able to add it on to your coverage.
If it is included, your travel insurance could cover you for things like the cost of buying a new flight ticket and the cost of the ticket you were unable to use, but policies different from provider to provider.
Some credit cards include travel insurance, but again, you will have to check your individual policy.
Rescue fares
Last-minute flight bookings can cost an arm and a leg, but if your airline goes bust while you’re already on a trip, you may be able to book a “rescue fare” with another carrier.
For example, JetBlue is offering US$99 one-way rescue fares to passengers due to fly with Spirit Airlines until Wednesday 6 May, while Delta announced on 2 May it would be offering reduced fares over the next five days.
Other airlines offering rescue fares include United Airlines and Southwest Airlines.
