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Options for stranded air passengers

Stranded passengers
Passengers have limited options if they find their airline in financial difficulties  


By CNN's Avril Stephens

LONDON, England (CNN) -- Holidaymakers and travellers are used to tour operators going out of business, not airlines.

Governments have been keen to prop up ailing national airlines in the past, but the difficulties of cash-strapped airlines, such as Swissair last month and now Sabena, threatens thousands of passengers.

Only one other European scheduled airline has had to stop flights in the past because of financial problems -- Bulgarian airlines earlier this year.

David Henderson, manager of information at the European Airlines Association, told CNN: "It is virtually unknown in the world for airlines to have to halt flights.

"There have been only one or two instances worldwide."

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But debt-laden Belgian national airline Sabena is to suspend operations on Wednesday, government and staff sources have told Reuters. It was known Sabena was fighting for survival with a board meeting and the publication of its business plan due this week.

Most analysts say that with $2.1 billion of debt which it is unable to service, the company has little option but to file for bankruptcy.

It would be the first European Union flagship airline to fail.

Sabena is 49.5 percent owned by Swissair and the Swiss regional subsidiary Crossair.

Short of checking the balance sheet of an airline before booking in future, a limited number of avenues are available to passengers to help protect them from having their fingers burnt.

Full refund

The best protection comes with a ticket bought through a tour operator or a consolidator -- those companies, which often advertise in the back of national newspapers, and which buy the tickets from the airlines to sell on cheaply.

In the UK these two groups, by law, have to take out an Air Travel Organisers' Licence to protect against problems.

A European Union directive requires similar action in Europe, maintained by the individual nations' governments.

Under ATOL cover, which is organised by the Civil Aviation Authority, passengers are eligible for a full refund or an alternative flight.

If a passenger buys another ticket ATOL will pay for the cost of the initial ticket but not any upgrade.

The passenger must get in touch with their tour operator or consolidator to begin a refund claim.

Although tour operators and consolidators are obliged under law to have ATOL protection, passengers are advised to make sure the cover exists when they purchase their tickets.

Difficulties arise when the tickets are business purchases or have been bought directly from the airline.

Then the traveller has no protection other than that offered by the credit card company, if used.

If purchased with a credit card, the ticket usually has to be worth more than £100 ($145).

A passenger can contact the airline to become a creditor, but is unlikely to gain any satisfaction from such a route.

Travel insurance can be taken out to cover an airline becoming bankrupt but the cover varies from policy to policy.



 
 
 
 


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