When a travel company stops trading, the right route depends on what failed, what you bought and how you paid. ATOL, package insolvency protection, card claims and insurance are not interchangeable schemes.
Start with the transaction and the disruption that actually occurred. Travel disputes often involve several businesses, but their responsibilities are not interchangeable.
Key points
- ATOL can protect qualifying flight-inclusive packages and certain flight sales by ATOL holders; check the certificate rather than assuming every flight is ATOL protected.
- If an ATOL holder fails while protected travellers are abroad, the CAA can arrange continuation/repatriation depending on the failure arrangements.
- A direct scheduled-airline failure may leave card or insurance routes where ATOL/package protection does not apply.
- ABTA failure arrangements apply only in relevant cases involving ABTA members and the specific protection provided.
Diagnosis
First: what exactly happened?
Identify the problem before choosing the remedy or escalation route.
| What happened? | What to check first |
|---|---|
| Your package organiser has failed | Find the ATOL/package protection documents and the official failure notice. |
| The airline itself has ceased trading | Check whether you booked direct, through an agent, or inside an ATOL-protected package. |
| The hotel/platform has failed | Identify whether package protection, card recovery or insurance applies. |
| You are already abroad | Prioritise official repatriation/continuation instructions before making expensive independent arrangements. |
| You paid by card | Check chargeback and, for qualifying credit purchases, Section 75 alongside insolvency protection. |
Check ATOL protection from the certificate
ATOL is not a generic guarantee for every travel booking. If a flight-inclusive booking is protected, you should have documentation identifying the ATOL holder and protection.
Use the CAA failure page for the specific company because claim/repatriation instructions vary by failure.
If the ATOL holder fails before travel
Protected consumers can generally use the ATOL process for refund of the protected booking where the trip cannot proceed. Follow the CAA's company-specific claim instructions and preserve proof of payment.
If the failure happens while you are abroad
The CAA can work with suppliers to allow protected travellers to complete the holiday and return, or arrange repatriation depending on the circumstances.
Do not assume you should immediately buy a new long-haul flight before checking the official failure instructions unless urgent circumstances require action.
Scheduled airline failure
A direct flight-only booking with a scheduled airline is not necessarily ATOL protected. CAA guidance points consumers toward the travel agent where one was used, card-provider routes such as Section 75/chargeback where applicable, and travel insurance including scheduled-airline-failure cover where purchased.
ABTA and other protection
ABTA has failure arrangements for relevant member failures, but ABTA membership is not the same thing as ATOL and does not make every booking financially protected in the same way.
Follow the specific failure notice and deadlines.
Package organiser versus supplier failure
If a hotel or airline supplier fails but your package organiser remains trading, the organiser remains the key contractual/statutory point and should arrange the package services or alternatives under the package framework.
Do not prematurely treat a supplier failure as if the organiser itself has become insolvent.
Section 75 and chargeback
Card routes can be valuable where insolvency protection does not cover the transaction or where a direct supplier fails. Section 75 has statutory conditions; chargeback is a card-scheme process with time limits.
Provide the card issuer with the failure notice, booking documents and evidence that the service will not be provided/refunded.
Travel insurance
Some policies include supplier or scheduled-airline failure, but coverage varies. Insurers may require you to pursue refunds or statutory protection first because policies often exclude recoverable losses.
Who is responsible?
Once a business is insolvent, ordinary complaint handling may stop being useful. Responsibility shifts to the applicable protection/claim route: ATOL for qualifying protected bookings, package organiser if only a supplier has failed, card provider for eligible card recovery, insurer for covered unrecovered loss, or the insolvency process for residual claims.
What can you realistically ask for?
Before travel, the aim is usually refund or replacement arrangements. If abroad, continuation/repatriation becomes the priority. Card and insurance claims may cover gaps but are subject to their own limits. An unsecured insolvency claim can be legally valid yet produce little or no payment, which is why statutory/protection routes should be checked first.
What to say when a card provider demands proof of failure
Provide the official CAA/ABTA/company failure notice, booking documents, payment statement and evidence the service will not be supplied/refunded. If the bank asks for a 'negative response letter', check whether the CAA has published one for the failed airline/provider. Explain any ATOL/insurance claim already made so the bank can identify the unrecovered amount.
Escalation
Follow the official failure portal and deadlines first. If a card issuer rejects a chargeback/Section 75 claim, use the bank complaint and FOS route. If an insurer rejects supplier-failure cover, use the insurer complaint/FOS route. Keep recoveries reconciled across all schemes.
Important exceptions and edge cases
ATOL protection can differ between flight-inclusive packages, flight-only sales and bookings made through agents acting for disclosed ATOL holders. A failed non-UK supplier may sit outside UK protection even though the payment was made from the UK. If only one component supplier fails, the package organiser may still have to provide the package rather than directing the traveller into the supplier's insolvency. Where a card/insurer pays, preserve the settlement because the protection scheme may require that amount to be deducted from any later claim.
Evidence worth keeping
Travel disputes are usually won or lost on the booking chain, timings and contemporaneous evidence. Preserve the original record rather than relying on screenshots taken weeks later where possible.
Common responses - and what they do not necessarily prove
| The business says | ConsumerWise view |
|---|---|
| "The airline failed, so your package is over." | If the organiser is still trading, it can remain responsible for delivering/rearranging the package. |
| "All holidays are ATOL protected." | No. Check the actual booking and ATOL certificate. |
| "Use chargeback; we cannot help." | Card recovery can be one route but does not automatically displace applicable ATOL/package obligations. |
| "ABTA membership means ATOL protection." | They are different schemes with different scope. |
What to do
A practical next-step plan
- Find the official CAA/ABTA/company failure notice.
- Identify whether the booking is ATOL/package protected or a direct supplier purchase.
- If abroad, follow official continuation/repatriation instructions before self-booking where possible.
- Prepare card/insurance claims for any uncovered loss.
- Keep a schedule of what has been recovered from each route to prevent double recovery.
Official sources
Check the current source material.
Travel rights can depend on route, airline, booking structure, country, provider membership and the date of the event. Check the live official source before relying on a formal deadline, compensation amount or scheme rule.