Last Update: 18 May 2020
This COVID-19 is causing lots of bankruptcies, especially in the airlines industry. What does it mean? How can we deal with this? Here’s an update of the airlines that are going bankrupt, and what does that mean for you.
Airlines Bankrupt or About To Bankrupt
- Norwegian Air: Norwegian has cancelled almost all flight operations. Their subsidiaries (in Sweden, Denmark) have filed for bankruptcy. Also stopped all long-haul flights. (x)
- Flybe (UK): The company has collapsed and website is no longer operating. (x)
- Virgin (Australia): The company has opt for a restructuring and seek outside investment as the Australian government is not bailing them out. The frequent flyer program is also currently suspended. (x)
- Air Mauritius: Similar to Virgin Australia, they have filed for voluntary administration to avoid bankruptcy. (x)
- South African Airways: planning to lay off its entire workforce. They have no more cash. (x)
- Interjet (Mexico): grounded more jets and current status can be interpreted as a “technical bankruptcy”. (x)
- La Compagnie (Mexico): suspended all flights until at least 1 June 2020 (x)
- Germanwings: Part of the Lufthansa Group, Germanwings will be joining Eurowings as Eurowings files for bankrupcy (x)
- Maimi Air: filed for bankruptcy on 24 April 2020 (x)
- Hainan Airlines (China): airline has rejected refund requests and facing increasing financial issues (x)
- Finnair (Finland): lays off 2,400 people
- SAS (Scandinavia): fires 520 pilots. Planning to liquidate Norwegian and restructure SAS.
- Wizzair: Lays off 1200 staff and another 430 in the next few months. Remaining employees see 30% cut.
- Air Europa (Europe): IAG abandons the takeover of Air Europa
- Avianca (Colombia): files for bankruptcy (x)
- Thai Airways: Going bankrupt (x)
How Does This Affect You?
- If you purchased your air tickets with any of these airlines, call your credit card provider and cancel the airfare. This can only be done if you paid the tickets with credit card.
- If not paid with credit card, check with your insurance provider. See if your policy covers similar segments like “Scheduled Airline Failure Insurance (SAFI)” or “End Supplier Failure”.
- Check if you are available to be refunded using the ATOL fund.
- If you are requesting a refund (cash or credit), be prepared that there might be a possibility that you cannot get your refund, since the airlines have no money. You will not receive refunds from the airline itself. You could get refund from travel insurance or other compensations.
- If you paid with debit card, you can ask for a “chargeback” with your bank, as long as you have the proof of purchase.
- About frequent flyer miles: use miles for gift cards or merchandise. Make future bookings on partner airlines to use your miles. (Note: you could keep them and hope the airlines do not declare bankrupt. If they declare bankrupt, your miles are worthless.)
What to do moving forward?
- Best option: If you are booking directly via the airlines, book with your credit card (see point 1 above)
- Second best option: If you are NOT booking directly via a third party, book with flights that are ATOL-protected (see point 3 above)
- Always remember: Have travel insurance and documents with you. That means your flight details, receipts AND ATOL receipt. ATOL receipt is not just any random e-ticket or airline ticket.
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