Agents are being urged to have airline failure insurance in place as fears rise that more airlines will collapse following Cobalt Air’s demise.
The Cypriot airline, which operated 20 ex-UK flights a week, failed last Wednesday, less than three weeks after Primera Air’s collapse.
Alan Bowen, legal adviser to the Association of Atol Companies, fired the warning shot about failure insurance in the wake of the failures.
“Agents should have scheduled airline failure insurance if they are booking flight-only direct with airlines, or warn customers to take out insurance,” he said. “There is no protection unless the agent takes out failure insurance.”
Bowen believes there could be more airline failures this winter, as holidaymakers delay booking until after Brexit on March 29 next year.
“Agents need to be aware of the potential for failures in a difficult market,” he added. “There is a concern, but I’m not saying panic.”
Only this summer, Cobalt Air temporarily raised agency commission from 1% to 3% to encourage GDS bookings.
A number of agents were caught up in Cobalt Air’s failure, including Swords Travel, whose managing director Mark Swords was due to fly with the carrier from Athens to Larnaca. He rebooked on Cyprus Airways at a cost of £800 to join a fam trip in Cyprus.
“It makes me realise how valuable we are, as agents,” he said. “It’s a stressful process and I wouldn’t want any customer to have to deal with this stress on holiday.”
Roy Collett, managing director of Colletts Travel, which was unaffected by Cobalt’s collapse, said: “We don’t like to book airlines we are not familiar with. We advise clients to book by credit card.”
Olympic Holidays rebooked clients due to travel back to the UK on Cobalt on alternative carriers. Refunds and free amendments on future bookings are being offered.