Flight cancellations and what brokers need to tell clients about holiday cover

2nd October 2017

It’s been a bit of a calamity of late when it comes to flights for UK holiday makers. Monarch Airlines ceased trading this week and all its future flights and holidays have been cancelled. Reports say that flights returning 110, 000 holiday makers from abroad following Monarch’s collapse will cost around £60m. While government is set to pick up the tab, it’s certain that some people will be left out of pocket.

Then of course recently Ryanair has apologised to outraged customers over its decision to cancel up to 50 flights a day for six consecutive weeks until the end of October 2017.

As Europe’s largest budget carrier, they cited errors in allocating holiday leave to pilots and a sharp decline in their punctuality as the two main reasons for their actions and published a list of affected flights on their website. It is expected that the cancellations will affect more than 400,000 passengers, on 2, 024 different services.  

The debacle has forced many passengers, both affected and not, to peruse their travel insurance policies carefully and consider alternative travel arrangements. It also provides the perfect opportunity for brokers to dispel some of the myths regarding claiming for cancelled flights.

Contrary to popular belief, in most cases travel insurance policies do not directly provide compensation for accommodation and associated costs if an airline cancels a flight. In most cases, insurers will only cover specific limited reasons for cancellations and it is therefore important to advise clients who are buying a travel insurance policy to look for one that provides cancellation cover for any cause beyond their control and one where they are unable to claim back from any other source.  Usually, these policies may be slightly more expensive than standard policies, but would place clients in a better position should they be affected by a similar situation to the Ryanair crisis.

While a travel insurance policy may not specifically cover an airline cancelling your  client’s flight, most policies will provide cover for other costs that are incurred by the passengers because of their flight being cancelled. This incudes not being able to complete the journey to a hotel that has been pre- booked, missing a connecting flight or for having to cancel a car hire that was booked at the airport of your destination. Not all travel policies will cover all or any of this, so it is important that brokers go over the finer details with their clients.

Those passengers who wish to obtain compensation for a cancelled flight need to be reminded that they can do so by directly applying to the airline. Individuals can do this regardless of the level of cover provided by their travel insurance, or even if they have no travel insurance at all. Under EU legislation, passengers can claim up to €250 (£222) on cancelled flights up to 1,500km, which rises to €400 (£355) for longer flight distances and claims are usually paid within a week or less, if approved by the airline.

Although Ryanair has agreed to pay eligible customers flight compensation, a bill which could mount to £18 million, The Commission for Aviation Regulation stipulates that an airline must provide at least two weeks’ notice of a cancellation to avoid paying compensation. Therefore, while those passengers with flights cancelled within the next two weeks could be eligible, others with flights booked towards the end of the month may not.

Brokers should also warn clients against pre-emptively cancelling an unaffected flight and booking with an alternative carrier as there is no mechanism for a refund in this case. It's better rather to keep on top of time schedules and find out if there will be any cancellations before heading to the airport. 

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