Airlines and travel companies do sometimes go out of business, occasionally stranding travellers or leaving them out of pocket. Knowing how you are protected, and how to protect yourself, is important. This guide explains travel insurance and airline or travel-company failure, the role of ATOL, and the safeguards worth having in place.
The risk of a provider failing
Travel providers can and do collapse. Airlines have continued to fail in recent years; for example, Eastern Airways ceased operations in October 2025 and entered administration, and it was not covered by the ATOL protection scheme. When a provider fails, travellers can lose money paid for flights or holidays, or in the worst case be left abroad, which is why understanding the protections available before you book really matters.
ATOL protection for package holidays
ATOL, the Air Travel Organisers' Licensing scheme run by the Civil Aviation Authority, protects most package holidays that include flights. By law, UK companies selling such packages must hold an ATOL licence. If an ATOL-protected company collapses, you are entitled to a refund if you have not travelled, or, if you are already abroad, to be looked after and brought home. ATOL is the main safety net for traditional package holidays bought through a tour operator.
What ATOL does not cover
ATOL has limits. It generally covers package holidays including flights, but flights bought directly from an airline, on their own, are usually not ATOL-protected, nor are many do-it-yourself trips where you book elements separately. So if you book a flight-only deal directly with an airline, ATOL will not help if that airline fails. Knowing whether your booking is ATOL-protected, by checking for an ATOL certificate, tells you whether this safety net applies.
Check the ATOL certificate
When you book a package that should be ATOL-protected, you should receive an ATOL certificate confirming it. You can also check a company's ATOL registration on the Civil Aviation Authority's website before booking. Doing this check, and keeping any ATOL certificate safe, confirms your protection and gives you the documentation you would need to claim if the company failed. It is a simple step that verifies a key protection is genuinely in place.
ABTA and non-flight packages
For package holidays that do not include flights, such as coach or rail holidays, ABTA membership offers a similar form of protection, helping customers if an ABTA member fails. So depending on the type of holiday, ATOL or ABTA may be the relevant scheme. Checking which protection applies to your particular booking ensures you know where you would stand if the company providing your holiday were to cease trading.
Scheduled airline failure insurance
For flight-only bookings not covered by ATOL, scheduled airline failure insurance, or SAFI, can cover the cost if your airline goes bust, paying for replacement flights or your losses. However, SAFI has become much harder to find in the UK market, and many policies, even premium ones, no longer include it, so you must check the policy document specifically. End supplier failure cover similarly protects against the failure of other suppliers like hotels when booked separately.
Section 75 and your credit card
A valuable and often overlooked protection is Section 75 of the Consumer Credit Act. If you pay for something costing over 100 pounds on a credit card, the card provider is jointly liable if the supplier fails to provide it, including if a travel company or airline collapses. So paying for flights or holidays by credit card can give you a route to a refund even without ATOL or SAFI, which is why it is widely recommended.
What to do if a provider fails
If your airline or travel company fails, first check whether your booking was ATOL or ABTA protected, which determines your route to a refund or repatriation. If not, see whether you paid by credit card for Section 75 protection, or whether your travel insurance includes failure cover. Keep all your booking documents and receipts, as you will need them to claim, as our guide to making a claim explains.
Package holidays versus DIY trips
Whether you are protected against a provider failing depends heavily on how you booked. A traditional package holiday including flights, bought through a tour operator, is usually ATOL-protected. A do-it-yourself trip, where you book flights, accommodation and other elements separately, often is not, leaving you to rely on credit card protection or specific failure cover. Recognising which kind of trip you have booked tells you where you would stand if a supplier collapsed.
Check before you book
A little checking before booking reduces your risk. You can verify a company's ATOL registration on the Civil Aviation Authority's website, and the CAA encourages travellers to confirm protection independently rather than trusting a deal that looks too good to be true. Be wary of unusually cheap offers, especially those asking for payment by bank transfer rather than a protected method, as these can be scams that leave you with no recourse.
If a provider fails while you are away
If your airline or travel company fails while you are already abroad, an ATOL-protected package means you should be looked after and brought home as planned. Without that protection, you may need to arrange and pay for your own return and then seek to recover the cost through Section 75, failure cover, or another route. Keeping calm, checking your protections and retaining all documentation is the practical way to handle being caught out mid-trip.
Why paying by card helps
Paying for flights or holidays by credit card is one of the simplest protections available. Under Section 75, for purchases over 100 pounds, the card provider is jointly liable if the supplier fails to deliver, including through insolvency. This can give you a refund even where ATOL does not apply and your insurance lacks failure cover. For larger travel purchases, using a credit card is a sensible habit precisely because of this protection.
The practical takeaway is to build in protection before you travel: favour ATOL-protected packages where you can, pay by credit card for larger bookings to gain Section 75 protection, and check whether your insurance includes failure cover if you book independently. Layered together sensibly, these protections mean a provider going bust need only be an inconvenience rather than a financial disaster, and you can book your trip with far greater confidence.
In short
Airlines and travel companies sometimes collapse, so protection matters. ATOL, run by the CAA, covers most package holidays including flights, giving a refund or repatriation, but not flight-only bookings made directly with an airline. ABTA covers non-flight packages. Scheduled airline failure insurance is now rare and must be checked for, while paying by credit card gives Section 75 protection on purchases over 100 pounds. Check your protection before booking.
Where to get help and next steps
Read cancellation cover, see whether you need a policy in do you need travel insurance, and know how to claim. This is general information, not financial advice.