Good Time For Insurance Companies To Promote Failed Airline Coverage
Robert JonesAir travellers have been warned that insurance which covers airline bankruptcy could be extremely useful. This comes after Scottish budget carrier Flyglobespan collapse last week, leaving thousands of UK passengers stranded all over Europe without any back up plan.
It’s not necessary for scheduled airlines to be bonded, unlike travel companies, and customers can however get separate insurance which would cover any scheduled carrier failure.
Of all trips sold in Ireland destined for foreign travel, more than 50 percent are not included in any sort of package. These independently purchased tickets therefore do not fall within regular bonding protection programmes.
Scheduled carrier failures as well as insolvency by third party supplier are covered by travel insurance company Multitrip.com. The firm warned that more carrier failures might be on the way next year and that purchasing this type of insurance coverage would be a logical and safe option at this time.
E-Clear, the payment-processing firm, has been seen has being somewhat responsible for the collapse as it retained travel transaction money.
At the time of the collapse last week, it was said that E-clear was holding on to £34 million (€38 million) of Flyglobespan’s transaction payments, stemming from a combination of flights which had already been flown and ones which were still to be taken.
UK legislation allows a refund when such a purchase has been paid via a credit card just as long as more than £100 (€113) has been disbursed for the service or item.
Managing firm PricewaterhouseCooper, the receivers of the failed carrier, are investigating E-Clear’s decision not to transfer the money on to its client Flyglobespan.
This practice appears to be common place amongst payment processing firms as they do this in order to insulate themselves from collapsing airlines.
Last year, low cost carriers XL and Zoom, which also went through insolvency, endured the same situation. It a practice called credit card holdback.
Meanwhile, Flyglobespan two main no-frills rivals, Ryanair as well as easyJet, have both come up with affordable rescue packages in order to help repatriate some of the failed airline’s customers left stranded abroad.
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Filed under Business & Finance, Europe News, Travel News, UK News, World News