Passengers advised to get cover for airline failures

Following the collapse of the Scottish airline FlyGlobeSpan, passengers have been advised to seek out scheduled airline failure cover with their insurance companies to ensure that they will be covered in the event that a company goes under after the booking has been made. Scheduled carriers currently do not have to be bonded in comparison to travel companies that do. This means that passengers can get a type of travel insurance that covers them for scheduled carrier failures.

Currently more than 50 per cent of passengers flying from Ireland have not booked their tickets as part of a package scheme and therefore all of those tickets fall outside the protection of a bonding scheme. There are many companies that can offer passengers protection for scheduled airline failures and it is likely that there will be many more failures next year leading to a large number of passengers who will be left out of pocket if they do not use the insurance cover. Some of the money used to secure bookings for FlyGlobeSpan was withheld by E-Clear, a payment processing firm, and they have been partially blamed for the collapse.

It has just been revealed that E-Clear held onto more than £34 million in the form of payments made by passengers for FlyGlobeSpan flights and this figure includes flights that have been taken as well as some that have not. If you spend in excess of £100 on a credit card than by UK law, you are entitled to a refund. The fact that E-Clear is holding onto the money is being investigated but they are not alone. Payment processing companies are holding onto more cash than ever before as a way to insure themselves against the collapse of an airline.