Aviation Industry Bankruptcy and Service Cessations
The U.S. Department of Transportation (DOT) recognizes that bankruptcies in the aviation industry may leave travelers with great uncertainty and in some cases travelers may be stranded far from home. To help aviation consumers who are affected by an airline or ticket agent bankruptcy, DOT offers the following information and some practical tips for consumers. This information relates to general circumstances involving bankruptcy in the United States. Other countries may have bankruptcy laws that apply to foreign carriers and foreign ticket agents.
What is Bankruptcy?
- When a company faces financial difficulties, it may seek protection under bankruptcy law. When a company files for bankruptcy, it does not have enough money to pay everyone it owes. At the end of bankruptcy, the company may be set free from any unpaid debts.
- For more information about bankruptcy in general, see the Department of Justice’s webpage at https://www.justice.gov/ust/consumer-information and the United States Courts’ website at https://www.uscourts.gov/services-forms/bankruptcy.
My airline or ticket agent declared bankruptcy. How does this affect me?
- An airline or ticket agent bankruptcy does not necessarily mean that your flight has been canceled or that you can’t be compensated for canceled flights or travel disruption.
- The airline or ticket agent may attempt to stay open and continue operating by reorganizing; or
- The airline or ticket agent may stop operations and go out of business through a process called liquidation.
- There are different options you may take to protect your interests.
- The aviation consumer protections provided to passengers may be impacted by bankruptcies.
What if my airline is still operating flights?
If you still plan to travel, contact the airline or ticket agent.
- Contact the airline or ticket agent before heading to the airport and find out if your flight is still scheduled to fly and if there have been any changes in the flight or flight schedule
If your itinerary changes and you no longer wish to travel, your rights may depend on who initiates the change.
- What if the airline canceled or significantly changed my flight?
- Bankruptcy law is complicated and can affect your right to a refund. If the airline or ticket agent has filed for bankruptcy, the company may be temporarily prohibited from providing refunds and/or vouchers – for example, to conserve assets.
- If an airline or ticket agent that has filed for bankruptcy refuses to refund you for a flight that has been canceled or significantly changed and you used a credit card to purchase your ticket, you may be entitled to a credit from your credit card company under the Fair Credit Billing Act. When contacting your credit card company, include the following:
- Your account number;
- A photocopy of your ticket/itinerary information or a copy of your receipt;
- State that your airline or ticket agent has declared bankruptcy and that you did not receive the service that you charged to your card. If the transportation was partially used, identify the used and unused segments;
- State that you are requesting a credit pursuant to the Fair Credit Billing Act.
- If an airline or ticket agent refuses to refund you for a flight the airline canceled or significantly changed and you purchased travel insurance, contact your travel insurance company to see if you are eligible for compensation under your travel insurance policy.
- What if I no longer want to travel?
- If you purchased a non-refundable ticket but your flight is still scheduled to operate, then you are not entitled a refund.
- If you purchased a fully refundable ticket, contact the airline or ticket agent to find out if it can provide a refund or other alternatives.
What if my airline or ticket agent has gone out of business or the airline has stopped flying?
Does bankruptcy mean I can't get my money back?
- Even though your airline or ticket agent has filed for bankruptcy and even if the airline has ceased flying, you may be able to obtain a refund through the credit card company you used to purchase the ticket or from your travel insurance company.
- You may also be able to file a proof of claim in the bankruptcy proceeding to recover a partial refund.
I used a credit card to purchase my ticket. What should I do?
If you used a credit card to purchase your ticket and are entitled to a refund, you should file a claim with your credit card company.
Write to your credit card company at the address listed on your monthly statement for disputing a charge (this might not be the address where you send your payment) and include the following:
- Your account number;
- A photocopy of the ticket, itinerary, or receipt;
- If the transportation was partially used, identify the used and unused segments; and
- State that your airline is in bankruptcy and ceased all operations, you did not receive the service that you charged to your card, and you are requesting a credit pursuant to the Fair Credit Billing Act.
- The credit card issuer must receive this notice no later than 60 days after the date that you received the first monthly statement that listed the charge for the transportation, although credit card companies sometimes waive this deadline for future transportation.
I used a debit card to purchase my ticket. What should I do?
There are no aviation consumer protections for debit card purchases.
However, some debit card issuers may voluntarily provide protections for consumers.
If you purchased air transportation with a debit card, contact the issuer of your debit card to see if you are eligible for reimbursement.
I purchased travel insurance for this trip. What should I do?
- If you purchased travel insurance through the airline or another source, be sure to check with the insurance company to see if you are eligible for reimbursement.
What if I am stranded away from home because my airline has stopped flying?
Airline bankruptcies are especially difficult for travelers who are already far from home.
Check with other airlines that operate to your destination to see if they will accept your ticket, on a confirmed or standby basis, or will offer you a discount on a new ticket by waiving advance purchase requirements or other restrictions.
If you purchased travel insurance, you may want to reach out to your travel insurance company before you make alternative travel arrangements
Additional information regarding overseas travel emergencies: