Primera collapses, passengers stranded

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Travel insurance

Danish-registered airline Primera Air ceased all operations at midnight last night and is expected to declare bankruptcy, stranding many UK travellers overseas as result.

The airline has been operating for 14 years but only began offering budget long-haul flights out of the UK earlier this year. It has ceased operations because of a failure to secure long-term financing, but it is thought that its decision to compete in the low-budget marketplace with similar airlines such as Wow was too ambitious.

Unfortunately for passengers who were expecting to take outward or return flights after midnight on Monday, the airline is not covered by the Civil Aviation Authority’s ATOL Protection scheme, which only covers package holidays. Passengers on Primera flights back to the UK have been advised by the CAA that they will need to make alternative arrangements, leaving many in a sticky financial situation; UK nationals are currently stranded in various places, including Spain, whilst there have also been reports of Canadian travellers stranded in France.

In further bad news, unless passengers’ travel insurance policies specifically include Scheduled Airline Failure Insurance (SAFI), they may be unlucky when it comes to claiming refunds; the CAA advises that passengers seeking ticket refunds will need to contact Primera Air directly, or through an airline ticket agent if they originally used one to book.

Up until comparatively recently, SAFI was a fairly uncommon coverage, an optional add-on provided by only a couple of insurers. It is more common now, but it may be the case that UK travellers’ penchant for purchasing the cheapest travel insurance cover – or foregoing cover entirely – may deprive them of this benefit.

Advice from GoCompare

Georgie Frost, Consumer Advocate at UK-based financial services comparison website GoCompare, has offered some advice to customers who may have been affected by the collapse: "[This] comes almost a year to the day since the collapse of Monarch Airlines sparked Britain's biggest ever peacetime repatriation. Now we have news of another airline going belly up, leaving customers stranded and out of pocket. [If customers] have SAFI as part of their travel insurance policy they will be able to claim on that for the cost of the flights and for other holiday expenses up to the maximum claim limit as specified on the policy. Customers with travel insurance should contact their insurer for further guidance."

While this collapse clearly strikes a further blow to consumer confidence in the travel industry, Frost went on to say, 'it's also a reminder to anyone planning a trip abroad to get appropriate travel cover': "When GoCompare analysed the Defaqto matrix, out of 1,032 annual multi-trip policies, 617 don't cover for financial failure, while 415 policies offer a maximum sum insured up to £4,000 or more, so this feature is becoming more commonplace. Make sure you check the Ts and Cs properly, that the policy is right for you, that holidays are ATOL protected and that you at least pay the deposit with a credit card if it is over £100 to benefit from the protection afforded by Section 75 of the Consumer Credit Act."