Stranded by a Grounded Airline?

If you’re one of the thousands who have been stranded by the Direct Air shut down, you have undoubtedly told yourself that you should have known better—you get what you pay for. Didn’t you know that before? Airlines that run on the cheap, do so for a reason. 

And now you’re stuck, having to cough up a couple of thousand dollars to get home by Monday: all to save $50 or so on a single ticket.

Are you going to get your money back?  Maybe, some.  But don’t bet on it.

But don’t give up. Here’s what you should do.

If you charged your tickets to a credit card, call your CC company and tell them you didn’t get the goods and services you paid for.  If you bought your tickets recently, your CC company might reimburse you.  If it was quite a long time ago—some travellers actually bought their tickets eight or nine months ago—you can pretty well forget it.

Call your travel agent.  By now your travel agency has figured out what they intend to do, which may not be much, since they don’t have much recourse against an airline that has gone into default and has no money to even pay its fuel bills.  But try.

If you dealt directly with the airline and paid them cash: pray.

For Ontario passengers, you may want to call the Travel Industry Council of Ontario (tico.ca), a non-government consumer agency that regulates the Ontario travel industry for advice.  TICO sometimes is able to get some reimbursements for victims of grounded suppliers, but since this was a U.S. based charter airline, that didn’t fly into Canada, how much clout they have is doubtful.

Then there is the possibility that you bought travel insurance to protect your investment—but trip cancellation insurance has a lot of limitations and some of the major policies do not cover supplier defaults for bankruptcy, etc. which this might be.  Trip cancellation/interruption is more useful for interruptions due to misconnections, or weather interruptions, or cancellations due to volcanic eruptions etc.

In addition, trip cancellation/interruption insurance is coverage of last resort which means it will pay out only if you can’t recover your losses from the supplier, or tour packager or travel agent, or consumer/government agency. And you have to show that you have tried.

Call all of these sources and keep calling them until you get results.  Keep all of your receipts too, in case one of them decides to pay out.  But forget the receipts for chips and cokes at the airport.  If you get payments for part of your trip you’ll be lucky.

The lesson? If a deal looks too good to be true, it is. Certainly it pays to fare shop among airlines: not everybody has to pay Air Canada’s prices to get to Florida. But you have to be realistic.  And an airline that is set up specifically to attract Canadians prepared to drive a couple of hours and cross a border to get to it is in a very fragile market.

Next time you travel, deal with travel companies and suppliers you know, just as it’s best to deal with travel insurance companies who have good long track records and have personnel who can clearly explain what their products cover.

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