Airline Insolvency-Pasenger Rights

On the collapse of the Scottish airline, FlyGlobespan, previously reported, those customers who had booked a package holiday with the company were protected by the Civil Aviation Authority’s Air Travel Organiser’s Licensing scheme (ATOL). This enabled those abroad to continue with their holiday and arrangements were made to provide them with alternative flights home at the end of it. Those that had yet to travel were entitled to a refund.Those who had booked a flight-only deal were not covered by the ATOL system, however. If they paid for the flight by credit card they could obtain a refund from the credit card company under Section 75 of the Consumer Credit Act 1974. This does not apply to charge cards (e.g. American Express, Diners etc.) or to debit cards but some of the companies that issue these do provide protection under their terms and conditions of issue. It did not matter whether the customer paid for the flight in total with a credit card: provided that even part of the payment was by credit card and that this amount was £100 or more then they were covered for a full refund.There was some confusion in this case, however, as FlyGlobespan used the ATOL logo on their website leading to some travel agents and customers to think that all bookings, including flight-only were covered. The CAA stated that they were entitled to do this and that it was for the customer to read the terms and conditions to see which travel arrangements were and which were not included.John

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