Watchdog - Holidays and flights

Keith Richards from ABTA, the Travel Association, explains how you'll know if you're covered in the event of an airline collapse such as XL or Zoom.

83,000 passengers were left stranded in 40 destinations around the globe after parent company XL Leisure went into administration, while another 200,000 with flights or holidays booked for future dates were left wondering what would happen to their travel plans - and their money.

Some will get their money back, but others won't - it all depends how they booked their trip, and who with.

Most of the stories about holiday companies and airlines that arrive at Watchdog are less dramatic than the collapse of XL, but travel is still one of the topics we get most complaints about. Brits go abroad more than ever before, and although most of us continue to take our holidays as a package booked with a tour operator, the rapid growth of independent travel means an increasing number of people book their flights and hotel themselves.

Either way, it's worth knowing what your rights are before go away, as in some cases - for example if your flight is delayed - you may find you've more entitlements under the law than you expected, or indeed than the airline tells you. Or, you may find you'd assumed you were covered in situations when you're not.

We've outlined here some basic rights and regulations regarding travel - you can find more detailed advice on the websites of the Air Transport Users Council, www.auc.org.uk, or ABTA -The Travel Association, www.abta.co.uk.

Travel basics

Any travel arrangement you book will be subject to booking conditions. You should read these carefully as they will affect your rights and those of the travel company. These conditions should not be written in such a way as to unfairly penalise you.

Any complaints with a tour operator or airline should in the first instance be taken up with the company directly - and it's always best to do this when the problem arises. You have a legal duty to "mitigate the loss" - that is, give the tour operator a chance to put the problem right.

So if it's a problem with a hotel, always raise it while you're there rather than waiting to write a letter when you get back. Take notes of things as and when they occur, where possible take photographs or videos, and swap names and addresses with others affected.

When you get back, send a short, succinct letter detailing the problem and what your requirements are (for example, an apology, explanation or compensation).

If none of that helps, your last resort may be the Small Claims court or the Arbitration Scheme run by the ABTA.

Keith Richards from ABTA sums up the essentials of making holiday complaint.

Package or book-it-yourself?

As the XL situation showed, your rights can vary dramatically if you buy a package rather than simply booking the various elements of your trip yourself.

A package holiday is a holiday that consists of two or more elements, for example, transport and accommodation, that are sold to you together at an inclusive price.

The Package Travel, Package Holidays and Package Tour Regulations 1992 offer comprehensive protection, and make the tour operator liable for the actions of their suppliers. That means you'll be covered if any aspect of the package goes wrong - for example if the airline goes bust, the hotel suddenly closes, or there's an issue with any other supplier whose services are part of the deal. They're overseen by the Government's Department for Business, Enterprise & Regulatory Reform (BERR). Passengers who booked their XL holiday as a package were all covered under these regulations; those who were already at their destination were brought home by different airlines at no extra cost to themselves.

If you book a package holiday that includes a flight, then you - and your money - are protected under what's called the ATOL scheme, so look for companies that are 'ATOL protected'. This is operated by the Civil Aviation Authority (CAA). The ATOL scheme will also protect you if you book a package holiday that doesn't include a flight; in that situation your money will be protected either by way of a bond held by a trade association, or by way of an insurance policy, or by placing your money into a trust account.

When you book a holiday that's ATOL protected, you should be given proof of this at the time of booking by the tour operator - indeed they're obliged to do so. That can also help if for whatever reason the travel agent you've dealt with suddenly goes out of business.

In some situations you may also be protected if you buy a flight only through a travel company that's a member of the ATOL scheme.

Unfortunately, if you book a flight only direct with an airline, you don't benefit from any of this protection. Airlines do not hold ATOLs, and therefore there are no bonds to reimburse customers if an airline ceases trading. However, you may still be covered by your travel insurance: check the terms carefully, and always look for insurance that includes cover for Scheduled Airline Failure. The Post Office is one of the big names that still offers this as standard, but you'll still find plenty of smaller companies doing the same. Make sure you check this when buying the policy, as you can't generally add this cover on to existing policies.

You'll also get some degree of protection if you bought your flights with a credit card (see Credit cards, below), but only if you've spent over £100.

The XL passengers who've lost out are those who booked a flight only direct with the airline, using a debit card, and whose travel insurance didn't include cover for Scheduled Airline failure.

If for any reason there's a problem with accommodation you've booked independently, again you'll only be protected via your travel insurance or credit card.

If a charter airline company goes bust, it's generally been booked as part of a package or through a company that's ATOL protected, so you should be offered a replacement flight or a refund.

Flights and baggage

Flights are covered by international legislation which cover your rights if an airline loses your baggage or if your flight is delayed or cancelled.

The Montreal Convention, which covers most flights, makes airlines liable for 'damage occasioned by delay', which for consumers most obviously means lost or delayed luggage. A bag is delayed if it's missing for up to 21 days, after which time it's officially deemed lost. But there are no set rules on how airlines should assess baggage claims: some airlines offer immediate one-off payments to cover emergency purchases (such as toiletries or underwear), some will pay a set amount per day up to a maximum number of days, while others prefer to pay out money only on production of receipts for essential items. So you'll need to be able to prove direct financial loss. If the bag is subsequently deemed lost, then you'll be asked for a list of what was in it, and possibly receipts - much as an insurance company would (indeed you may find claiming through your travel insurance more straightforward). The Montreal Convention places a limit on the airline's liability.

If your bag is damaged you should report it immediately at the airport, where an airline representative will complete a Property Irregularity Report and give you a copy. Not having one of these doesn't mean you can't make a claim to the airline - it might just make things easier. You'll then need to make a claim in writing to the airline, but you'll need to do it fast: the Montreal Convention sets a time limit of seven days for claiming for damaged luggage, and 21 days for a claim relating to baggage that's delayed.

European law offers plenty of protection when it comes to delays and cancellations. Though they're frequently misunderstood, EU regulations require airlines to provide assistance to passengers during delays. For short-haul flights, you're entitled to meals, refreshments and even phone calls when you've been delayed more than two hours, while on long-haul flights the same compensation kicks in after four hours. If a delay extends beyond five hours, passengers can request a refund if they choose not to travel. If they'd rather wait, the airline is responsible for the cost of accommodation. If a flight is cancelled alternative flight options should be offered. Where these are unacceptable, a full ticket refund should be provided, and in some instances compensation.

There are exclusions to this: airlines don't have to pay out in 'extraordinary circumstances' such as bad weather, strikes or security alerts, so they'll need to accept that any delay is something they're liable for. And the rules only apply to EU carriers flying to or from a European airport.

The same EU regulations also protect you when a flight is cancelled less than 14 days before the scheduled departure, or if a flight's been overbooked and you're denied boarding. In the latter situation, depending on the flight distance and the delays incurred, you may be entitled to between £125 and £600 compensation. These regulations are fully set out on the Air Transport Users Council website at www.auc.org.uk.

Credit/debit cards

All UK credit cards are governed by the Consumer Credit Act of 1974 which requires credit card companies to refund customers for non provision of services. This makes paying by credit card by far the safest way of paying for a holiday or flights, as provided you paid more than £100, you'll usually get your money back.

There's no legal cover with a debit card, however, under a system known as 'chargeback', Visa regulations will allow you to apply for a refund from your bank if you have used a Visa debit card.