Avoiding Travel Company Collapses

Being stranded or losing your vacation airfare when an airline or other travel company collapses financially is not a traveler’s worst nightmare, but it’s close. If you’re wondering how to avoid getting into that situation, I have some tips that might help.

Or they might not help at all. It’s such a dicey time for the airline industry that I’m not sure when I last flew on an airline that wasn’t in bankruptcy, coming out of bankruptcy or contemplating bankruptcy. (Oh, wait. There was that time on Southwest.)

To protect yourself, the experts advise you to buy travel insurance. And before you do that, you’ll want to look at the lists of  travel agencies and tour operators that the travel insurance companies won’t cover. In fact, even if you skip the travel insurance, you ought to look at the lists. These are handy – though by no means exhaustive – rundowns of companies that you want to deal with carefully, if at all.

TravelGuard has a Travel Alerts page that lists a few companies that it will not cover, period. "We will no longer offer coverage for people traveling with these carriers" it says. Under that, on the same page, is a much longer list of companies for which it will not cover financial default.  At present this list includes two major U.S. airlines.

TravelEx Insurance Services has a similar Special Notices page that lists many companies that it won’t cover at all, and others that it won’t cover for default.

And TravelGuard also has a handy Strike List of companies whose unions have authorized strikes against them. 

If you’re considering travel with some agency or tour operator or airline you’ve never heard of, it’s certainly worth browsing through these lists to see what’s up. But I can’t promise that it’s a foolproof strategy.

Yesterday the Mexican government grounded Lineas Aereas Azteca because of safety concerns and financial problems. I immediately checked to see if the airline appeared on any of the above-mentioned lists when this happened.



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