The question on the minds of many travellers thanks to events such as the collapse of several airlines and the ongoing talk of a global recession. What happens if my Holiday Airline goes Bust?
On Friday 21st September 2008 XL Leisure Group, Britain’s 3rd largest travel company announced it was going into administration, with a debt of £143 million.
What followed was the biggest peacetime evacuation in UK history, undertaken by the Civil Aviation Authority (CAA).
It took over two weeks to complete and involved around 260 flights by 20 airlines, both British and foreign. XL passengers were stranded at resorts in the US, Caribbean, Egypt, Europe and Turkey and this meant the CAA faced a huge logistical operation.
The first job of the CAA was to compile a list of passengers who fell under the umbrella of the CAA administrated Air Travel Organisers’ Licensing scheme (ATOL) and were therefore entitled to travel home on its rescues flights for free.
It is then responsible for finding flights and aircraft to bring these passengers home.
Passengers not covered by the ATOL scheme are offered available seats on these flights, but are responsible for paying for meeting the costs involved.
What is ATOL?
The ATOL system started in the 1970’s following huge government pressure after the collapse of Court Line, which owned Clarkson Holidays.
That particular collapse left 35,000 people stranded abroad and 100,000 with forward bookings with no prospect of repatriation or redress.
The CAA has been managing the ATOL scheme for 30 years and it provides comprehensive protection to around 26 million people every year whilst travelling abroad.
All tour operators selling flights and holidays must hold a licence from the CAA and if the licence holder fails the CAA steps in to arrange transport home, or a refund for those who have not yet travelled.
Repatriation costs are met by the £1 donation via the Air Travel Trust fund, which is levied on each travel booking.
In the year to March ATOL helped 2000 customers of failed airlines complete their holidays and 21,000 received a refund of advance payments. During that period there were 25 failures and total expenditure cost £7.5 million.
Who is not covered?
In the latest collapse it was brought to many people’s attention that whilst some travellers were covered by the collapse some were not. Those not covered were in the main, flight only customers who hadn’t booked their flight as part of a package with a licensed tour operator.
With the rescue operation for XL now complete the CAA must turn its attention to the holders of 200,000 advance bookings. The CAA admits it will take several months to complete the refund stage of the operation.
