What holidaymakers need to know about it
Following WOW Air ceasing all flights and operations today, the recent insolvency of Flybmi and the forced sale of Flybe many holiday makers are rightly taking the idea of travel insurance more seriously in case they are left stranded abroad through no fault of there own if their airline becomes insolvent.
There is a small, often overlooked cover called SAFI which covers this very eventuality but not every policy includes it as standard.
Scheduled Airline Failure Insurance (SAFI) protects the policyholder if their carrier goes into administration.
R3, the trade body for the insolvency and business restructuring industries, urges passengers to check their insurance to make sure they are covered.
Chris Horner, licensed insolvency practitioner of Robson Scott and R3 member has said: “European airlines are in a transitional period, so passengers should ensure that where possible they have valid insurance and correct insurance before travelling.”
Checking insurance is possibly more vital than before as research from Defaqto has revealed that nearly half of UK travel policies do not include SAFI as standard.
Purchases under Air Travel Organiser’s Licence scheme (ATOL) are automatically covered, and your holiday provider must clearly state if they are registered under that scheme. However, this scheme does not cover flights which are booked separately.
“Credit card bookings may also offer some level of protection,but you will need to check with your card provider.”
SAFI can be taken out separately if your travel insurance policy does not already cover it and it might also cover travellers whose travel agents go into administration before they are due to fly too.
The government published the Airline Insolvency Review interim report in July 2018 on the risk of airline insolvency and how airlines can wind down with a minimum impact on passengers and taxpayers.
Not every company administration is successful however, you can read some of the reasons why here. WOW Air passengers who may be entitled to compensation are advised to contact the administrator or liquidator in case of bankruptcy.