You’ve done your research into different airlines, picked the perfect seat and purchased your ticket. You’re all ready for your next flight, only to find out that your airline has ceased operations. By being prepared, you can salvage what has suddenly become a bad situation. Here's what to do if your airline goes out of business.


What to Do If Your Airline Goes Out of Business Before Your Flight


Being prepared can safeguard you if the unforeseen happens with your airline. The best way to make sure you are protected is to use a credit card to pay for your ticket. This simple step will cover you under the Federal Fair Credit Reporting Act, which appears on the back of every credit card statement. If you book directly with the airline, and that airline either stops flying, suspends the route you were booked on or goes out of business, you are entitled to a refund to the card. If you booked your flight through a third-party seller or tour operator, you will need to contact them to get a refund.


Another option is to buy a flight insurance policy that covers airline bankruptcies. Read the fine print, though, so you know what the policy covers. Some insurance companies will only cover the cost of your loss if that airline is on their list of covered airlines.   


If the airline you're booked on does go out of business, take heart (and pick up the phone): Some airlines offer reduced rates to those affected by a sudden closure. 


What to Do If Your Airline Goes Out of Business While You Are on Your Trip


No traveler wants to find themselves halfway through a trip, only to learn their airline has gone out of business. If the airline you were supposed to fly suddenly goes out of business, stranding you in a foreign land with no way to get home, your priority should be finding another flight. The good news is, other airlines will sometimes step in and offer reduced fares for stranded passengers. The bad news is these reduced fares will depend on what availability that airline has. You won’t know until you try.


If you are stranded in the middle of your trip, you might be tempted to start your claim with your credit card company or with the closed airline first. Don't make this mistake. Time is of the essence, as you likely are competing for limited space with people who also are scrambling for replacement flights. Our advice is to grab a substitute flight first, then file the claim with the proper channels once you are back at home.


What To Do If Your Airline Goes Out of Business While You Are Waiting To Board


You are at the airport when you find out the airline you are about to fly on has gone out of business. What can you do? The bright side: You are at the airport where a number of airlines can help you get back on track. 

Start by talking to nearby gate agents to find out if there is anything their airlines can do to help you. Thanks to technology, you can start your flight search right at the gate. 


Having an airline go out of business while you are traveling is a nightmare and something no traveler would ever want to go through. By arming yourself with a little knowledge ahead of time, you can relieve some of the stress if you find yourself in this situation.


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