Boarding pass, check! Passport, check! Insolvent Airline Insurance..?


The summer holiday period is well and truly underway and many travellers are jetting off for weeks of sand, sunshine and questionable sangria. However, amongst the typical pre-holiday preparation of packing, printing the boarding passes and booking the airport taxi, travellers should check if they have Scheduled Airline Failure Insurance (SAFI).

A study, conducted in the aftermath of Monarch Airline’s collapse in October 2017 showed that significant number of travellers will be jetting off without appropriate protection in the event of their chosen airline going bust, potentially leaving them out of pocket by hundreds, if not thousands of pounds.

Many travellers incorrectly assume that their standard travel insurance will also cover scheduled airline failure. However, this is an incorrect assumption to make. Often, SAFI is not included in many standard travel insurance policies, potentially leaving many holidaymakers at risk.

If you are planning to travel abroad this summer, you may want to consider if you have the appropriate protection in place. If you have already got insurance cover, check the small print to confirm if the policy includes SAFI. If not, you may be able to add this on as a bolt-on, or alternatively, you may wish to obtain separate cover completely.

Note however that if, prior to booking flights, you are aware (or should have been aware, through it being reported in the media) that your chosen airline is experiencing financial difficulties, a SAFI insurance policy may well be invalidated and therefore you may not receive a pay-out if the airline actually does enter an insolvency process.

Notwithstanding the above, if you have booked a package holiday through an agent with Air Travel Organisers' Licensing (ATOL) protection, you should already be covered (but do check) in the event of an airline failure. Moreover, if you purchased your flights using a credit card, the Consumer Credit Act 1974 may provide additional cover in the event of an airline failure. Note, this only applies if the cost of the flights was between £100 and £30,000. If you have used a debit card to pay for the flights, you should be covered if you bought the flights using your overdraft.

To conclude, before jetting off, you should ensure appropriate travel insurance is obtained in any event. If you have booked flights as a standalone cost (i.e. as not part of a package deal, where you will be protected under ATOL), you should ensure that SAFI forms part of your policy.