Another airline insolvency highlights the need for travel insurance insolvency cover

By , May 4, 2012 11:19 am
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Danish no-frills airline Cimber Sterling declared bankruptcy on Thursday after its owners pulled financial support from the company.  The notice stated that passenger’s tickets are now worthless and all future flights have been cancelled.

The insolvency of another airline highlights the need for financial protection against the insolvency of airlines and other holiday suppliers, especially in these times of recession and uncertainty. We invest a lot of money in our holidays, so it’s important to make sure that our money is protected.

Travellers booked to travel with Cimber Sterling who bought travel insurance with insolvency cover or scheduled airline failure included should be able to make a claim on their travel insurance policy to recoup the cost of their lost ticket, although they will still need to arrange alternative flights to complete their journey.

Unfortunately the extension of ATOL Protection which came into force on Monday would be unlikely to protect passengers in this instance as passengers on low cost airlines tend to book direct their tickets with the airline rather than via a third party retailer.

Flights and holidays booked direct with airlines still fall outside of the ATOL Protection scheme, which means that your money is unprotected against the insolvency of the airline unless you buy travel insurance with insolvency cover or scheduled airline failure.

To find out more about protecting your holiday read our posts about travel insurance and insolvency cover.

Is your holiday protected for insolvency? Find out using our quick check infographic

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