Thomas Cook shares drop by 75% as it seeks further funding

By , November 22, 2011 3:18 pm
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As the travel industry struggles, do you need travel insurance with insolvency cover?

Travel insurance cover with insolvency cover is becoming
increasingly important as holiday makers continue to look for cheaper holidays
by putting together their own packages and travel companies experience tough
trading conditions.

travel insurance with insolvency cover

Thomas Cook Airlines G-CRPH

The news that Thomas Cook shares have gone into free fall this morning as it talks with banks to secure further loans to see it through to the end of the year, highlights the importance of checking what financial protection you have in place for your holiday.

I’ll stress at this point that Thomas Cook continue to trade as normal, but the fact that they are seeking to increase their borrowings in order to continue trading during the quiet winter months, is a stark illustration of the tough trading conditions that travel companies and airlines are facing at the moment.

The ATOL website is currently listing 24 travel companies which have become insolvent this year, and this morning it has been announced that Astraeus Airlines has gone into administration.

Against a background of tough trading conditions in the travel industry it is more important than ever for holidaymakers to check what financial protection they have when they book a holiday.

Anyone who has booked for a package holiday with Thomas Cook would be covered under the Air Travel Organisers’ Licensing (ATOL) scheme, which is funded by contributions from travel companies. This would be the same for any package holiday including air travel which is booked through a bonded tour operator.

However, people who have only booked a flight only direct with a flight company or airline, such as FlyThomasCook.com will not be covered by the ATOL scheme and should ensure that they buy suitable travel insurance that includes insolvency cover.

What is travel insurance with insolvency cover?

The level of financial protection you have for your holiday if a supplier becomes insolvent depends largely on how you booked it, which in turn means that how you booked your holiday will also have an impact on what level of travel insurance cover you should buy.

See our quick check diagram to see if your holiday is financially protected. Do you need travel insurance with insolvency cover?

Travel insurance with insolvency cover can provide the extra financial protection you need if you book your holiday independently. This type of travel insurance insolvency cover is often called Scheduled Airline Failure or Dynamic Packaging Cover – Some
companies will include it in their standard travel insurance policy, and some travel insurance providers have it available as an optional extra.

Check out our easy diagram to see whether your holiday is protected or you should consider buying travel insurance with insolvency cover.

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