Some of the worst news you can get when you're traveling for business is news that the airline you're flying has collapsed. Because most of us aren't traveling at the moment, airlines are collapsing. Flybe, Compass Airlines, Trans States Airlines, and most recently Virgin Australia have gone bust.
Depending on how long it takes for flying to be safe again, other airlines may not make it through, despite the bailout from the U.S. government. As the coronavirus continues to spread, we really don't know how long it will be until we can safely and confidently fly again. So what happens if you have a credit or ticket with an airline that goes under?
Here are some strategies you will want to look into. Note that if you are traveling while the airline goes under, the airline is unlikely to be able to find you an alternative way to get home. You will most likely need to book your flight(s) with another airline while you work on getting a refund for the original flight.
How did you pay for your travel?
If you booked your travel on a credit card, you may be able to get your money back. You will need to call your credit card issuer as soon as possible to explain the situation. You will likely need to submit a claim.
If you booked directly with the airline and paid with a credit card, you have the best chance of getting a refund. Credit cards have protections, such as the federal Fair Credit Reporting Act. So not only do you potentially earn points or miles, but you're also giving yourself some cushion.
If you paid with a debit card, you may be able to ask for a chargeback. A chargeback essentially is a reversal of payment due to services not being delivered. Unfortunately, you may not get any money back but it is worth trying, especially if you act quickly.
If you paid through PayPal, you may be able to get your money back. PayPal has a buyer protection program that may be helpful. You will need to contact PayPal to learn more.
Don't count on getting a refund from the airline. If an airline isn't operating, there aren't any protections for U.S. consumers. However, you should always check with the airline itself as this will vary across carriers and situations. If the airline is a budget airline that is part of a larger network, you may be able to get some assistance.
If you bought travel insurance, you will need to check with your insurance provider. Each company is different and some won't cover airline bankruptcy. The best way to find out is to call as soon as possible and explain your situation.
How did you book your flight?
If you booked through a travel agent, especially if it's a large company, they might have trip cancelation guarantees that will help you get your money back. If they don't, they will have advice and ways to help you out. Likely, they have other travelers in the same position.
If you booked through a third-party site, you will need to contact them directly. Unfortunately, they likely won't be able to help. If you went through a tour operating company, you will also need to contact them. They may have some protections that are applicable.
If you booked through your credit card's travel portal, such as the Chase Ultimate Rewards travel portal, you will need to contact your credit card.
Because of the uncertainty during this coronavirus pandemic, it is a good idea to monitor the situation. If you have a trip planned for the next few months, check with the airline to see what their cancelation policy is. Being aware of the news and having insurance coverage is the best way to navigate the unknowns.