Travel question: What happens if the airline I’m booked with goes bust?

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Indian carrier Jet has spiralled into financial despair (Jet Airways)

Q Over the past couple of weeks you have written a lot about Jet Airways and the rights of passengers who are booked with the airline. As someone who flew with Jet in the past, I am now concerned about how to make sure that I won’t lose out in future if an airline I’m booked with goes bust.

Linda C

A Tens of thousands of passengers booked with Jet Airways have faced extreme frustration and expense as the airline spiralled further into financial despair. I also have flown happily with Jet Airways in the past and feel sympathy for the excellent staff.

For future bookings, the miserable business has increased focus on what your rights are if it all goes wrong. It is worth saying that when I book with any of the most popular big airlines – such as British Airways, easyJet, Jet2, Ryanair, Virgin Atlantic, Air France/KLM, Lufthansa, Emirates, Etihad, Qatar Airways, Cathay Pacific, Qantas, Singapore Airlines, American Airlines, Delta, United and many more – I have no concern that my cash is at risk. They are all reliable and resilient airlines and the prospect of anything going awry within the next year (the furthest out you can book tickets) is, in my view, negligible. So the following applies only to airlines about which you have some concerns.

The easiest protection is to buy the flights as part of a package, including accommodation booked in the same transaction. Then the travel firm you buy from is responsible for every aspect of your trip, including replacement flights if needed.

If you are going independently, then insurance can be helpful. There are two slightly different kinds of cover that apply, and they are often sold as extras to standard travel insurance policies. The basic option, cheaper and weaker, is scheduled airline failure insurance (Safi). It generally covers you for getting a full refund of the cost of the flight tickets if the airline goes bust before you fly. If the airline closes down while you are away, it should also cover the cost of replacement flights home.

Supplier failure insurance is more expensive and more useful. It covers the extra costs incurred replacing the service provided by the failed supplier, in this case a flight to India. As many thousands of Jet Airways have found in the past few days, fares for flights on rival airlines are getting extremely expensive because of the sudden spike in demand. The insurer should also compensate you for unused accommodation, guided excursions, etc, which are lost because of the failure.

Finally, you can pay the airline direct by credit card, which means that you are covered under Section 75 of the Consumer Credit Act – making the card issuer jointly liable with the airline for delivering the service.

Every day our travel correspondent Simon Calder tackles a reader’s question. Just email yours to s@hols.tv or tweet @simoncalder