Cobalt collapse: everything you need to know about passenger rights

Rival airlines have already started offering ‘rescue fares’ for stranded passengers

Cobalt, based at Larnaca Airport in Cyprus, has stopped flying.

The airline flew from Gatwick, Heathrow and Manchester to Larnaca, its main hub, and from Gatwick to Athens. It offered connections to Beirut and Tel Aviv, and also served Frankfurt, Moscow and Paris.

Last-ditch attempts to procure additional funding failed, and late on the evening of Wednesday 17 October, the airline told the Ministry of Transport it would be grounded from early the following morning.

Many readers have contacted The Independent for advice. These are the key questions and answers.

What caused the collapse?

As with the failure of Primera Air earlier this month, Cobalt ran out of cash. October is a common month for airline bankruptcies, because very little revenue is coming in but large bills – for aircraft leases, fuel and handling – are mounting. And staff need to be paid.

At a time of rising oil prices and weak demand, smaller airlines with seasonal business are especially vulnerable; Monarch collapsed in October 2017.

As is customary, the collapsing airline waits until the last flight is in the air back to its base before announcing an end to operations.

The airline said: “Cobalt regrets to announce that it will be cancelling all Flights as of 23:50pm on October 17, 2018 due to indefinite suspension of Cobalt’s operations.

“Future flights or services provided by Cobalt will be cancelled and will no longer operate.

“Passengers who have un-flown tickets are instructed not to go to Larnaca Airport or any departure airport...as no Cobalt flights will operate and no Cobalt staff will be present.”

How many people are affected?

By the standards of easyJet or Ryanair, Cobalt was tiny, with fewer than one million passengers a year: Ryanair flies as many travellers every three days.

But The Independent calculates that around 10,000 passengers are stranded – they flew out on Cobalt but their return flight has been cancelled – and up to 100,000 people have forward bookings.

What can passengers who are stuck in Athens or Larnaca do?

The Cyprus Ministry of Transport says it hopes for a “smooth and best possible operation for the repatriation of stranded passengers”.

Passengers booked to travel on Thursday have been advised to buy an alternative single ticket and seek reimbursement from the ministry.

Normally very short-notice fares are extremely high, but rival airlines have already started offering “rescue fares,” which are traditional when a carrier collapses.

First out was Wizz Air, which is charging €89 for a one-way rescue flight from either Athens or Larnaca to its UK hub of Luton. It has set up a dedicate web page for Cobalt passengers.

“This rescue fare is valid for travel up to 9 December 2018 and is subject to availability on each flight,” says the airline.

“Customers will need to provide evidence of their bookings with Cobalt for the Larnaca/Athens-London routes.”

An easyJet spokesman said: “We are sorry to see the news about Cobalt Air and sympathise with all of their passengers who are affected.

“As a result, easyJet is offering a dedicated rescue fare, including hold luggage, to affected customers."

Passengers can use routes from Athens, Paphos or Larnaca to Gatwick, Paphos to Luton, Larnaca to Liverpool, or Athens or Paphos to Manchester.

Travellers must call 0330 365 5030 for fares and timings, and must submit their original Cobalt booking reference. The offer applies to the end of October.

The Independent is waiting to hear from British Airways and Norwegian about whether they will offer rescue fares.

Who will pay for my hotel expenses while I wait for another flight?

You, or possibly your travel insurer if you have a good policy that covers scheduled airline failure and its consequences.

I have a forward booking for next summer. What are my options?

If you booked direct, contact your card issuer. You should be able to get your money back under Section 75 of the Consumer Credit Act or the card firm’s chargeback rules.

With a good travel insurance policy, you may be able to claim back the extra cost of booking replacement flights. But consequential losses (eg you have accommodation booked in Cyprus but can’t reach it) are most unlikely to be covered.

You can try to sell on accommodation through an online platform such as TransferTravel.com for resale; if successful, the firm keeps 15 per cent of the value of the transaction.

If your flight with Cobalt is part of package holiday, the tour operator will normally rebook alternative flights on a different airline at no extra cost to you.

As we saw with the Monarch collapse, when some alternative fares were extremely high, tour operators may instead offer the option of you paying the difference or getting a full refund.

Will I also be able to claim for a more expensive replacement flight?

You can try to argue that your card provider should pay for what you booked, ie a return flight to Athens or Larnaca in August 2019, but experience suggests that is unlikely to be successful.

I have an outstanding claim against Cobalt for EC261 compensation. Will it be paid?

If you can prove the claim has been agreed but not paid, then you are an unsecured creditor. You can try to file a claim to the administrators.

In the unlikely event that funds are available, you would be in line for a share, but Cobalt owes many millions of pounds to secured creditors. Even with the sale of its most valuable asset – a daily pair of slots at Heathrow – there is almost no possibility that you will get anything back from the company.

Who will go bust next?

There are constant rumours in aviation about the apparently shaky state of airlines, many of which are groundless. The best protection is gold-plated scheduled airline failure insurance, but many of us are content to pay with a credit card – thus avoiding any direct losses in the unfortunate event of an airline collapse.