Airline insolvency

After spending precious time researching and booking a holiday the last thing you want to hear is that the airline or accommodation provider has gone into insolvency. Unfortunately this can leave passengers stranded abroad or unable to reach their holiday destinations.

If the flight or accommodation company do collapse, recovering any money from them could be difficult. So what other protection is available?


If your holiday is ATOL (Air Travel Organiser’s License) protected and you’ve received confirmation that it is, your travel provider should offer you alternative arrangements or a full refund. If you’ve already left the UK they should make arrangements to get you home.

Unfortunately, the protection doesn’t apply to airlines so if you book your flights directly from the airline you’re unlikely to be protected.

Your credit card provider

If you book your flights or accommodation using a credit card and the airline or accommodation provider goes bust, you may be able to recover the cost from your credit card company.

Section 75 of the Consumer Credit Act 1974 states that the card issuer is also liable where you pay for an item using a credit card but don’t receive it. Holidaymakers can use this protection to claim a full refund for any flights or accommodation paid for but not received because the airline or accommodation provider ceases to trade.

In order to qualify for this protection you need to have spent more than £100 and less than £30,000 on a single item.

Travel insurance

If you’re unable to claim back the cost of any part of your holiday from the provider or credit card company, travel insurance can be a useful safety net.

Each policy is different so make sure you read the documents carefully. Check whether insolvency is covered and if you’ll get the level of protection you’re looking for. You can always phone the customer service team if you’re unsure.

Sainsbury’s standard travel insurance includes travel disruption cover with annual and single trip policies.This can provide protection for any unused travel and accommodation costs (up to £5,000) in the event that you’re unable to travel because your airline or accommodation provider goes into insolvency. It can also cover the cost of a replacement flight (up to £1,500) or accommodation (up to £5,000) if your provider becomes insolvent while you’re away.

For full details see our travel disruption information.

Making a claim

In some circumstances you’ll need to pay for a replacement flight or accommodation and then claim back the costs later. For this reason you may wish to make sure you have access to some emergency funds in case you need them.

If you want to make a claim the first thing you can do is contact the travel, credit card or insurance provider. They can advise you of the claims process and may give you a claims form. Keep all your receipts and include these when you submit your claim.

Travel insurance overview

Terms & conditions

Travel Insurance is administered by Cigna Insurance Services (Europe) Limited and underwritten by Cigna Europe Insurance Company S.A-N.V. Cigna Insurance Services (Europe) Limited is authorised and regulated by the Financial Conduct Authority. Cigna Europe Insurance Company S.A.-N.V. is supervised in Belgium by the National Bank of Belgium and the Financial Services and Markets Authority, and subject to limited regulation by the Financial Conduct Authority.