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Late last summer Monarch Airlines and its associated companies ceased trading, with thousands of customers still abroad, and 750,000 customers who hadn’t yet flown losing their flights. And at the same time Ryanair cancelled 20,000 flights through the winter period due to, incredibly, an administrative error. We look at what your rights are if you get caught up in this.

Let’s start with what happens if you’re due to fly with any airline and your flight is cancelled. If your flight is scheduled for the two weeks following the cancellation you are entitled to a full refund or an alternative flight, from the original airline or another, plus compensation. If you have more than two weeks notice, the same applies but you’re not entitled to the compensation. In the first few weeks following the announcement of cancellations, there were reports that Ryanair weren’t acknowledging this right to be booked onto flights by other airlines.

Unlike Ryanair, Monarch Airlines no longer exists so were unable to refund money or to make alternative arrangements, and a non-existent airline is in no position to pay you compensation. For the passengers stranded abroad, the Government took the unprecedented step of asking the Civil Aviation Authority (CAA) to arrange for everyone to be flown home free of charge if they were due to come home within the first two weeks of the crisis. Some of these will have been ATOL protected and some not, but they were all flown home. Those not due to fly home until the end of the two week period, and who were not ATOL protected had to make their own arrangements at their own expense.

ATOL protection ensures that you will be taken care of if an airline or travel company goes bust and you have a booking with them. All package holidays booked in the UK have ATOL protection and you will be flown home if you are abroad, or your money will be refunded if you are yet to fly when the airline or travel company goes bust.

But the arrival of the internet has made it much easier for people to arrange DIY holidays, booking the flights, accommodation and car hire etc separately. In this case it is unlikely that they will be ATOL protected. No problem, they think, the travel insurance will cover it. But the fact is that most standard travel insurance policies do not provide Scheduled Airline Failure Insurance (SAFI). You will have to ask specifically for this to be covered, at extra cost, sometimes considerable extra cost. And whilst it may cover the airline failure, it probably won’t cover other losses such as the cost of hotels and care-hire already paid for.

You will be able to protect yourself by booking the flights etc by credit card. As long as the cost of an individual flight, hotel stay etc exceeds £100, the law states that the provider of the credit is equally liable (with the airline, travel company etc) if things go wrong. This isn’t going to get you home if you’re stranded abroad, but it will ensure that the cost of getting home is something you can claim for later. Many airlines levy an additional charge for using a credit card to book your flight, so you’ll need to weigh-up the extra cost with the chances that airline will go belly-up. With the value of the pound falling (aviation fuel usually has to be paid for in dollars) and terrorism leaving formerly lucrative destinations off- limits, times are hard for small airlines, so that calculation is not an easy one to make.

Those using a debit card rather than a credit card may be able to get money back through the Chargeback scheme. Chargeback is a little known scheme which gives you a chance of getting your money back from your bank if a service wasn’t provided, or if the airline went bust. But Chargeback isn’t a statutory scheme and has been found to have some limitations.


Cliff Shining