When an airline stops trading, EU261 compensation usually dies with it, but the fare often survives. Three routes pay from someone other than the airline: ATOL where a travel company sold you the trip, a card chargeback or UK Section 75 where you booked direct, and scheduled-airline-failure cover on some travel policies.
What to do, in order
- Find the paperwork first: booking confirmation, ATOL Certificate if you have one, proof of payment, and which card you used.
- If you are abroad, read the administrator’s and the CAA’s notices before you buy anything. ATOL-protected travellers are usually helped home.
- Pick one route from the list below and file it. Do not wait for the administrator to write to you.
- Open the card dispute early — the scheme window is short and it is not extended by the airline’s collapse.
- Only then chase the administrator, and expect nothing from that route.
ATOL, if a travel company sold it to you
ATOL is the UK scheme that protects a trip that includes a flight when the company that sold it stops trading. It covers flight-inclusive packages, and it also covers some flight-only bookings sold by a travel company — but only where the company issued you an ATOL Certificate rather than an ordinary e-ticket. A ticket bought directly from the airline’s own website is not ATOL-protected. If the ATOL holder fails, the scheme can keep you in your accommodation, reimburse what you spent replacing ATOL-protected parts of the trip, and arrange a flight home. ATOL does not cover a cancelled flight where the company is still trading.
Card chargeback or Section 75, if you booked direct
For a flight-only booking made with the airline, your card is the main route back. A chargeback asks the card scheme to reverse a payment for a service that was not provided; it works on debit and credit cards and for any amount. Section 75 of the Consumer Credit Act 1974 is stronger but narrower: it makes the card issuer jointly and severally liable with the supplier for breach of contract or misrepresentation, and under section 75(3)(b) it applies where the cash price of the item is more than £100 and no more than £30,000, on a UK credit card. The chargeback and Section 75 letter has the wording for both.
Travel insurance
Some policies carry scheduled airline failure insurance, sometimes sold as end-supplier failure cover. It is not standard. Read the wording rather than assuming, and check whether it pays only where no other route is available — many policies sit behind ATOL and Section 75.
Compensation dies with the airline; the fare usually does not. An insolvent carrier has no money for unsecured passenger claims, and filing an EU261 claim against an administrator is weeks spent on the least likely route. Put the effort into the routes that pay from a third party — the scheme, your card issuer, or your insurer — and treat the administrator as a formality.
Is there an EU version of ATOL for flight-only tickets?
No. Package travel is protected across the EU by insolvency arrangements under the Package Travel Directive, but a flight-only ticket bought straight from an airline has no equivalent fund. In practice the routes are the same: your card scheme, and travel insurance if the policy covers supplier failure.
How long do I have to start a chargeback?
Ask your bank, because the limit comes from Visa or Mastercard scheme rules rather than from legislation. The commonly quoted window is about 120 days, and it usually runs from the date the service should have been provided — your flight date — not the date you paid. That is a scheme rule your issuer administers, so its answer is the one that counts.
I booked through an online agent, not the airline. Who pays?
Try the agent first: it may still hold your money, and if it issued an ATOL Certificate it is inside the scheme. If the agent has also failed, go to your card issuer with both booking confirmations. If the trip was sold as a package, the organiser owes a full refund within 14 days of termination under regulation 14 of the 2018 Regulations, and that duty stands independently of the airline.
Can I still claim EU261 compensation?
Rarely in practice. The right exists, but it ranks as an unsecured claim against a company with no cash. If the airline is merely refusing to pay rather than insolvent, that is a different fight — send the refund demand, look up what you are owed in the amounts table, and escalate to the regulator if it goes quiet.