Posted 30th April 2019
by Martina Nee - Press & Communications

So, you’ve found out on the news the airline you bought that pricey flight ticket from an airline that has ceased operation, literally overnight? Or the travel agent has gone out of business putting your plans of lying by the pool, soaking up the sun and the sangria, in jeopardy? When news breaks that a business has gone bust, or on its way there, it can certainly have a huge impact on not just a consumer’s holiday plans but also cause extra financial and personal hardship.

Following the overnight shock of WowAir ceasing operations, this month we’ll be taking a look at what consumers can do if a trader goes out of business.

Our consumer success story of the month looks at how ECC Ireland helped a consumer get the €820 reimbursement he was promised after his accommodation booking was cancelled because the hotel was closing down. The consumer query examines what to do, including evidence to gather for redress later on, if there are last minute changes to your accommodation booking.

You can download a PDF version here, or simply read on!





What to do when an airline, ferry, travel agent/operator goes bust? Well, that can very much depend on the type of holiday you booked, how you booked it, and what redress options you have. In all situations, it’s important for consumers to act quickly in order to protect themselves.

When an airline suddenly ceases operation

Wow Air recently announced that it has ceased operations and cancelled flights leaving thousands of passengers in the lurch and desperately trying to make alternative arrangements or get their money back. Other airlines such as Flybmi/British Midland Regional, Cobalt Airways, Primera Air, and Germania have also faced the chopping block recently and, according to media reports, more airlines may be at risk. So, as you can see, it happens all too frequently and consumers should take steps to protect themselves soon after purchasing their flight ticket, particularly if the flight does not form part of a travel package.

The first thing to consider is travel insurance, but not just any policy!! There’s lots of choice out there with competing prices and the usual bells and whistles. To protect yourself from the all too real possibility of the airline going bust, you need to scrutinise the policy documents carefully to check that it will cover for financial failure.

When you’re searching online for travel insurance you should look for a link to the policy documents and then carefully scan the summary of cover to see if it includes ‘scheduled airline failure’ or similar; it should also give details of the cover limit and the excess to be paid in the event of a claim, if any. While you’re at it, you could also check for things like ‘strike’ cover as not all policies have this. Then, once you’re satisfied it has the cover that you want, it should be safe to go ahead and compare prices, and of course do all the usual checks that you would do with any online trader.

Normally, under Regulation (EC) 261/2004, when a flight is cancelled, the airline should offer rerouting or refund, however, this is not possible when the airline ceases operations. If you have been affected then there are a number of actions you can take:


Flight booked directly with the airline –

  • If you are already abroad, advice given by the Commission for Aviation Regulation (CAR) in situations like this has been to self-repatriate by booking directly with other airlines. Other airlines may offer flights at ‘special rescue fares’ and so it is worth checking if this option is available. For example, when Wow Air collapsed, Aer Lingus issued a statement offering such fares subject to availability.
  • Getting your money back – if you bought your flight directly from the airline and you used a credit/debit card to pay for it, then you should contact your bank or credit card provider immediately to request chargeback.
  • Contact your travel insurance provider (if you’ve followed the advice above that is ⬆️) as soon as you can to see how to pursue a claim.


Flight is part of a travel package –

  • Under EU package travel legislation consumers can contact the travel agent or tour operator directly to arrange for an alternative flight out to be able to continue their holiday, or, if already abroad, arrange an alternative flight home. This should be done as soon as possible.



When a ferry company stops sailing

If a ferry company stops trading and your plans to sail away has been scuppered, then your options are very similar to the above:

  • If you booked the ferry on a standalone ticket directly from the troubled company you may only be able to seek redress via chargeback or insurance.
  • If the ferry service is part of a package, then you should be able to contact your travel agent or tour operator to make alternative arrangements.
  • Some ferry companies also offer package holidays and, in such cases, you may be able to seek assistence (including repatriation) and make a claim through the relevant bonding scheme.



When the travel agent shuts up shop

When consumers book a package holiday (a traditional package or a customised/DIY package consisting of at least two travel elements) with a travel organiser they have certain protections under EU package travel legislation if something goes wrong. However, if the travel organiser has gone out of the business then the consumer can’t rely on that trader to assist. This is when bodies such as the Commission for Aviation Regulation (CAR) step in.

In Ireland, all travel organisers selling travel packages orginating in Ireland to destinations overseas are required to be licensed and bonded with the CAR, unless the travel organiser is established in another EU Member State and has provided to CAR evidence of having sufficient insolvency protection in that country. The aim of this is to provide consumer protection for refund and, if necessary, repatriation.

Licensed firms are required to provide the CAR with a bond, which can be drawn down in the event that a license holder ceases trading, leaving customers stranded abroad or travel contracts unfulfilled before the due date of travel. On top of the licensing and bonding the CAR looks after the administrative aspects of any refunds and claims. So, if the travel agent or tour operator goes out of business, and this business is bonded with CAR, then consumers should be able seek assistance. For example, when Lowcostholidays collapsed in 2016, the CAR assisted those affected and paid €3.35 million in compensation to 3,871 Irish people.

There are also similar schemes administered by bodies in other countries. For example, if you book your holiday with a UK travel organiser there are bonded schemes such as ABTA (Association of British Travel Agents) and ATOL (Air Travel Organisers’ Licence). However, the possible implications of Brexit should be considered, as these schemes may not cover consumers based outside the UK. In any case, it is always advisable to contact the tour operator before booking to ask such questions.

What steps to take:

  1. If you’re yet to travel then it is advised to contact the airline and/or the accommodation provider to see if the flight/room has been paid for and is still confirmed. If the answer is affirmative, you should in principle be able to stick to your original travel plan.
  2. It may be a case that only the flight is confirmed as it was paid for upfront but the accommodation has not been paid for yet. In this situation, you may decide to use the flight and go to the destination, pay for the accommodation again (after checking if this is possible), keep all receipts, and then, when you return, claim a refund of the original cost of the accommodation via the relevant bonding scheme. Another option may be to cancel the entire package altogether and make a claim.
  3. There is often a time limit to submit a claim. For example, claims through CAR must be submitted using the relevant form 60 days of the date from which the travel organiser failed or was unable to meet their contractual obligations to the customer.

If you can’t rely on the above protection, then the other course of action available would be to seek refunds through your travel insurance provider or chargeback.


When all else fails

If you cannot get redress by following the above, then the only other option would be to go through company’s liquidation process (if applicable). However, going down this route may not result in getting your money back. Unfortunately, consumers are regarded as unsecured creditors. This means that other creditors, such as the taxman and staff of the company, will rank higher than consumers when it comes to dividing the company’s assets and, as a result, there may be little or nothing left for consumers after secured creditors get all or some of the money owed to them.

The Competition and Consumer Protection Commission (CCPC) has further advice on its website about companies going out of business.



Consumer success story of the month:

An Irish consumer booked a hotel via a third-party intermediary accommodation website, however, shortly before the check-in date he was told that the reservation was cancelled because the hotel was closing down. On the advice of the third-party intermediary, the consumer then booked another a hotel and sent the invoice for the extra cost incurred, which came to €820, to the third-party for reimbursement. However, the consumer did not receive this money and the trader failed to provide a satisfactory response. ECC Ireland and colleagues at ECC Netherlands assisted by contacting the trader on the consumer’s behalf and as a result the full refund was provided.


Consumer query of the month:

Q: On the day of my flight to Austria I was told that the apartment I booked was not available and the alternative accommodation offered could only fit a maximum of six, which is not big enough for our large group. Plus, it’s going to cost an extra €70 per person. What can I do at this late stage? Do I have to accept it?

A:  In this situation it’s very important to check the terms and conditions, as well the customer service or FAQ section of the website, to see what it says about changes to the booking or liability of the trader. If you have a bit more time to decide, then looking for alternative more suitable accommodation yourself and cancelling the booking could be an option. However, this could prove very difficult on the day of travel. In situations where time is an issue, it is very important to request that the trader provides the full details of the alternative accommodation being provided in writing (e.g. email) including the reason for the cancellation of the original booking. If you are accepting the alternative accommodation, then you should respond (in writing) making it very clear that you are accepting it only because there is no other option available and highlighting the inconvenience and extra expense that this has caused. Gathering evidence such as correspondence, receipts, and screenshots will be very important if pursuing redress from the trader later.



If you want more information about this or any other cross-border consumer issue, please go to You can also follow us on Twitter.


The European Consumer Centre is part of the European Consumer Centres Network (ECC-Net), which covers 30 countries (all EU countries plus Norway and Iceland), and offers a free and confidential information and advice service to the public on their rights as consumers, assisting customers with cross-border disputes. ECC Ireland is funded by the European Commission and the Competition and Consumer Protection Commission.

Disclaimer: Whilst every effort is made to ensure accuracy, the European Consumer Centre cannot be held responsible for matters arising from any errors or omissions contained in this publication. The information provided is intended as a guide only and not as a legal interpretation.

© 2019 – European Consumer Centre (Ireland), CLG incorporated in Ireland, No. 367035, Registered Charity No. 20048617 – CHY14708. Located at MACRO Centre, 1 Green Street, Dublin 7.

This article was funded by the European Union’s Consumer Programme (2014-2020).

The content of this article represents the views of the author only and it is his/her sole responsibility; it cannot be considered to reflect the views of the European Commission and/or the Consumers, Health, Agriculture, and Food Executive Agency (CHAFEA) or any other body of the European Union. The European Commission and the Agency do not accept any responsibility for use that may be made of the information it contains.


Return to top