Low-cost airlines may have forever changed the travel industry, but traveling with them is not without its risks. The tradeoff for those ultra low-cost flights is fewer routes, no perks, and a business model that is sometimes untenable in the long-run. That’s why when Wow Air went out of business earlier this year, passengers were stranded all over the world. So how can you enjoy affordable travel while still protecting yourself from airlines going out of business?
Consider the destination
The more expensive or difficult the destination is to get to, the more risk you put yourself in when you book on a low-cost airline. Typically low-cost airlines have fewer routes, so one missed or cancelled flight might mean there’s no other alternative for days. The last thing you want to do is risk missing your vacation because of an issue with your outgoing flight. The harder your destination is to get to, the more it’ll cost you to rebook on another airline. Especially at the last minute. When you book, it’s a good idea to consider what other airlines fly that route in the event you end up having to make a last minute change.
Always use a credit card
There are laws in place all over the world to protect travelers from flight cancellations and delays. But if your airline went belly up between your outgoing flight and your incoming one, there’s going to be no money to reimburse you with. As a consumer, the only recourse you have to protect yourself from cases like these is to file a dispute with your credit card company, something that is not possible with a debit card. Some credit cards even have built-in travel insurance, which can help you recuperate some of the costs of other expenses like tours or hotels.
Get travel insurance
If you’re not covered some other way, you should always get travel insurance before a big trip. This is true for many reasons, not just in the event of an airline going out of business. Make sure that your particular insurance policy covers such an event. You might want to look for terms such as “airline bankruptcy,” “airline failure,” or “default” in the terms of the insurance. When in doubt, ask the company. You should know ahead of time what the insurance policy will cover in the event of an airline failure.
Book travel with free cancellation
Though you’ll have to find another way to get your money back for the flight, the easiest way to protect yourself for other travel expenses is to book accommodations and travel experiences that offer free cancellations. You may not be able to afford an alternative flight at the last minute if the airline you were flying with goes out of business or axes your route. Though still disappointing, the most stress-free thing you can do is simply cancel hotels or Airbnbs you had booked in advance and move on. If you don’t have this option, you’re stuck trying to get a refund for your flight, your accommodations, and whatever other tours or experiences you may have booked in advance.
Pay attention to news about the airline
All airlines could fail. There’s no way to protect yourself completely from this happening, but when you book with an established airline, the process of bankruptcy works a lot differently than one that is two years old and has no back-up funding. In fact, many airlines file for bankruptcy all the time as a financial process that doesn’t affect the consumers at all. But if you’re hearing chatters about a relatively new or small airline being in trouble, it may be worth your while to avoid them until their financial situation becomes more stable.
This can be tricky, because if an airline is about to go broke, the first thing they’re going to do is offer flights at deeply discounted rates to try to save themselves. But saving a couple hundred dollars up front might cost you more in the long-run if you find yourself without transportation to your holiday destination.
Have a back-up plan
If your airline is teetering on the edge of extinction, make sure you have some idea of what you can do for alternative transportation. It’s for this reason that low-cost carriers are especially good options for short-haul flights, like when you’re already in Europe and you’re going one or two countries over. If your airline went bust, it wouldn’t make a difference. Hundreds of other flights service the same nearby destinations. Or you could hop on a train or a bus and lose nothing but a little bit of time. Make sure it won’t be impossible for you to travel if anything happens to your booked flight.
Should you avoid low-cost airlines altogether?
With Ryanair’s constant cancellations, Norwegian’s abrupt elimination of certain North American routes, and WOW’s sudden failure, the news is littered with good reasons not to fly with low-cost carriers. It might seem like common sense to avoid these airlines altogether and stick with major airlines who are part of established global alliances. The downside is that this common sense can be very expensive.
I’ve flown all over the world with cheap carriers and never had a bad experience. I saw all of Scandinavia on Norwegian, and I zig zag all around Europe constantly on Ryanair and EasyJet and Vueling and Eurowings. Despite all their bad press, I would strongly recommend these airlines. I probably wouldn’t have been able to afford to do all that flying exclusively on major national airlines.
The trick is to have a little bit of foresight when you’re booking travel. If Ryanair starts cancelling over 1,000 flights a month like they were in 2018, give them a pass for a while. If you’re trying to get to an obscure island in the Pacific, you should probably have more reliable transportation. As long as you know how to protect yourself, you mitigate the risk of booking with an airline that might not exist in three weeks.
