The recent collapse of Icelandic budget airline Wow Air serves as a timely reminder for travel agents to offer clients supplier insolvency protection, according to one agency boss.
Mobile Travel Agents co-managing director Roy Merricks said all travel agents need to ensure their clients are adequately protected in the event a travel intermediary or end supplier becomes insolvent and unable to deliver a product or service.
The Wow Air collapse brings the number of European carriers forced into insolvency in the last 18 months to five.
Merricks said many of the 4000 or so passengers affected by the Wow Air collapse will now be looking towards their travel insurance for refunds.
“Travel insurance covers for a host of factors – be that a lost suitcase, damaged camera or overseas medical assistance – but when it comes to supplier insolvency protection, that’s a whole different ball game,” he said.
“Sadly, while some of those passengers may see some return on ticket purchases, it is highly likely many of them won’t with the airline having stated the chances of reimbursement are ‘narrow’ and already advising passengers to address claims to the airline’s bankruptcy trustee.
“And remember, this doesn’t just happen to overseas companies. Locally, we only have to go back to December and the Bestjet Travel collapse.”
Merricks said that while consumers may buy optional travel insurance products via their consultants or online, many of these either do not offer supplier insolvency protection, and if they do, it is invariably limited to a very small number of suppliers and always at additional cost.
“The same applies if a consumer pays for their travel arrangements by credit card,” he said.
“There may be some insolvency protection provided under complimentary travel insurance but the emphasis is very much on the ‘may’.”
Mr Merricks said the Wow collapse provided a compelling reason as to why consumers needed to ensure that when they book their travel, they book via agents who are able to provide iron-clad, 100 per cent money-back guarantees in the event of insolvency.