What happens to my booking if my airline goes bust?
The short answer
It depends on how you booked. If you bought a package trip from an ATOL holder, the travel firm must provide alternative flights or a full refund. If you booked a flight directly with the airline, ATOL does not cover it, but you may be able to claim through your card provider or scheduled airline failure insurance.
What if I booked a package holiday with flights?
ATOL is financial protection for package trips that include a flight, run by the UK Civil Aviation Authority (CAA). It is not travel insurance. You should be given an ATOL Certificate. The CAA says that if you booked flights or a trip with an ATOL holder and received confirmation that you are ATOL protected, the travel firm is responsible for your flight arrangements and must either make alternative flights available so the trip can continue, or provide a full refund. If you are abroad, it should arrange to bring you home at the end of your trip.
If the travel company itself fails while you are abroad, the CAA says it will help you continue the trip by assisting you to stay in your accommodation where possible, reimbursing money spent to replace ATOL protected parts of the trip, and arranging flights home depending on the circumstances.
What if I booked a flight directly with the airline?
The CAA's ATOL guidance says that if you receive a valid e-ticket in exchange for payment, the ATOL scheme does not cover the flight. Its page on scheduled airline failures also states that failed airlines it lists, such as Blue Islands, are not covered by ATOL. Your options are then:
- Credit card: if you paid the airline directly by credit card you might be protected by Section 75 of the Consumer Credit Act 1974. Ask your card issuer.
- Debit or charge card: you may have chargeback rights. The CAA says you may have similar cover with a Visa debit card, so check with your bank. Some card providers ask for a negative response letter.
- Insurance: travel insurance that includes scheduled airline failure cover (SAFI) may pay out. Contact your insurer.
- Agent: if you booked through an airline ticket agent, speak to the agent first, as they may have provided SAFI cover.
What does scheduled airline failure insurance pay?
The CAA says some airlines and agents offer a specific SAFI policy or include similar protection in broader travel insurance. What you get varies: a policy may cover the cost of the original tickets or the unused portion, or the extra cost of buying new flights, such as new tickets back to the UK.
What should I do straight away?
- Check your booking confirmation for an ATOL certificate or number and keep it.
- Do not assume your ticket is protected. ATOL can apply to some flight-only bookings where you do not receive a valid e-ticket immediately, so ask the seller before you book.
- Check the CAA's failure page for the airline concerned and follow its advice for UK passengers.
- Contact the party you paid: the ATOL holder, the agent or your card issuer.
- Keep receipts for any replacement flights you buy, in case you can claim them back.
Sources: UK Civil Aviation Authority: Failure of scheduled airlines, ATOL (run by the CAA): What is ATOL protection?. Read 5 November 2026. Rules and fees change, so check the official page before you travel.
Frequently asked questions
Is a flight-only booking covered by ATOL?
Only in limited cases. The ATOL scheme does not cover a flight if you received a valid e-ticket in exchange for payment, and it does not cover flights booked directly with the airline.
Can I get my money back from my credit card?
You might. The CAA says that if you paid an airline directly by credit card you might be protected by Section 75 of the Consumer Credit Act 1974, and you should ask your card issuer.
What if I am already abroad when the airline collapses?
For an ATOL protected package, the travel firm should arrange your return home. For a flight-only booking with the airline, the CAA points to card protection, SAFI cover or your travel agent, so contact them as soon as possible.
What is a negative response letter?
A letter the CAA publishes confirming an airline's position, which some card providers ask for when you claim after an airline failure.
Will another airline take me home for free?
The pages we read do not say other airlines are obliged to. They direct you to your card provider, insurance or agent.