How to get your money back from a bankrupt airline

Businessman plunging, but has a parachute on his backIf an airline goes bust after you have paid by credit card, but before you travel, your best way to get your money back is to lodge a dispute via the bank that issued the credit card.

Your grounds for requesting a charge-back (in other words a refund) is “service not provided”.  Credit card companies as a rule will honour that.

If you have paid cash for the ticket then you are dependent on the honesty, and capability, of the airline.  There could be a protracted wait as your claim will compete for funds with other creditors.  The best rule with regard to travel payments is “don’t pay cash, pay by card”.

If you have already travelled the outward leg and they go bust before your return flight then you had better have travel insurance that covers default because you are not going to be able to recover that via a bank dispute.  Default is almost certainly not covered by the basic insurance that you get when you pay by card.

Frequent business travellers should probably not take out a policy for each time you travel as this could prove more expensive than the cost of one lost journey.  If you need to protect against that then you should to try include it in your general corporate risk insurance, if you can.

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