Cobalt – 17th October 2018
As of 17th October, Cobalt airlines have ceased all operations. We’d recommend contacting the online travel agent with whom your reservation is with. We’d also advise travellers to contact their travel insurance and credit card providers to see whether they are able to claim back expenses incurred.
What to do when your airline goes bust or fails
Whether it’s during or before your holiday, the same rules apply. However, booking direct vs booking third party, booking with a credit card vs debit card and booking as part of a package holiday can affect your rights to claim compensation, and your travel insurance. You’ll also want to make sure your booking was ATOL Protected (more on that later).
How to claim if you booked with the airline direct…
on credit card
If you have booked your flight with a credit card and it was of a value over £100, speak to your credit card provider as you may be able to make a claim under Section 75 of the Consumer Credit Act 1974. This makes your credit card provider equally liable for your loss along with the bankrupt flight provider. It’s also worth checking whether your travel insurance policy includes scheduled airline failure insurance (SAFI) cover.
on debit card
Claiming a refund for a debit card booking is a bit trickier than if you used your credit card. Oddly maybe, if your current account had slipped into its overdraft when you paid for your flight, then it may be deemed to have been ‘bought on credit’ and covered by Section 75 of the Consumer Credit Act 1974 – that is, as long as your purchase was, in the same way, more than £100 – and less than £30,000.
If you were sensibly in the black when you booked, you could get the money back for your flight using ‘chargeback’. This is a system used by Visa, Maestro, Mastercard and American Express (yes, on debit as well as credit cards) – just as long as you have proof of purchase.
and if you need to claim low cost flights (less than £100)
You might still be able to claim those low cost flights. If you bought your low cost tickets by credit card but the total amount came to less than the £100 minimum needed to invoke Section 75 protection, then it depends on whether your credit card provider offers protection for claims under £100, so you are best checking with them.
How to claim on insurance or ATOL Protection if you booked online with Skyscanner, or a travel agent
If you booked a flight-only deal through a travel agent, you may be covered by the ATOL (Air Travel Organiser’s Licence) scheme. BUT not all flight-only deals are. You will be covered if: the agent is ATOL-protected; or you received an official ATOL receipt upon payment. However, if you didn’t book with an ATOL-protected agent, or you didn’t get an ATOL receipt, just an e-ticket or airline ticket, you may not be covered.
If your flights were part of a package holiday
Tour operators must use an ATOL License for package holidays abroad. This means all bookings through a tour operator should be ATOL protected – make sure you have the certificate saved prior to travel, not just a receipt or confirmation.
If you booked flights, and a hotel/car hire at the same time
Can you still claim money back for additional hotels and car hire that you booked at the same time as the flight?
If you purchased car hire worth £300, and a hotel worth £200, you will still be offered a refund under ATOL (there is no minimum amount here, the entire booking is covered). This is known as a Flights Plus booking, and car hire or hotel bookings are also protected by ATOL when booked through a tour operator.
If you booked flights with the airline, and you’re abroad when the airline goes bust.
If the airline has gone bust, and you are abroad without ATOL Protection, you will need to book flights back with another alternative airline. There is a possibility that you can claim money back from the first airline if you booked direct with a credit card, your booking was ATOL protected, or it was covered on insurance, but bare in mind you will need to shell out the cash up front for the alternative flights and it may be a few weeks before your claim goes through. Make sure you contact your own airline or insurance provider to discuss reimbursement before booking flights home.
How to make a claim with ATOL
Check your certificate to check the individual procedures, but it usually involves filling out a form or calling your tour operator. Check out further information on claims on the ATOL website.
Will my travel insurance cover airline failure?
Unfortunately, airline financial failure or insolvency is rarely included on most travel insurance policies. However, there is no single rule for this and you should consult your own travel insurance provider to check their approach to airline failure (it may be under ‘supplier failure’).
There are 3 main rules: always book ATOL Protected, book on a credit card if possible, and make sure you have access to your travel documents when flying (including your booking, receipt, and travel insurance documents).
What is SAFI?
If you are travelling from outside the UK, please see the EU Passenger Rights for further information.