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Alitalia - What happens when airlines go bust?

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1. Posted by Ed83 (Budding Member 29 posts) 8y

Anybody up on their consumer rights?! I booked an Alitalia flight to go to Argentina in June and it now looks as though the airline will may well have ceased operating by then as are that broke they can't continue flying. So does anyone know what happens in this instance? I booked at a UK branch of STA travel using a VISA credit card. My insurance company said I wouldn't be covered with them. I heard rumour that STA may be responsible as they are part of the ATOL scheme or maybe even VISA.

Does anyone have any experience of this?

Many thanks, Ed

2. Posted by chemgal (Respected Member 149 posts) 8y

This is a tough situation. Firstly you should contact STA Travel and see if you can cancel the ticket with no penality at the moment and purchase a new ticket. Then you don't have to worry about this.

If Alitalia does go bankrupt then the travel company you booked with (STA Travel) is not responsible for refunding the ticket as they are just the agents for Alitalia. If your ticket paid for using your credit card then you can contact Visa and ask them to deny the charge. This will only work if you paid Alitalia for the ticket rather than STA Travel.
Otherwise you will have to apply through the bankruptcy court for the amount of the ticket. It would also be worth contacting your insurance company as they may cover this.
It is also possible that Alitalia won't go into bankruptcy and the Italian government will bail them out.

3. Posted by bentivogli (Travel Guru 2398 posts) 8y

Right at the moment, there is still a good chance that Alitalia will be saved from bankruptcy one way or another. KLM/Airfrance isn't out of the picture yet, and since Il Cavaliere partly owes his recent election to his promises about saving 'the national pride of Italy', I expect we will see at least one or two attempts coming from that direction as well.

Other than that, cancelling your ticket if possible and rebooking through another carrier might be safest. In case of bankruptcy, consumers' claims are generally outweighed by those with bigger interests (tax authorities, big creditors, etc.). In the case of a state-owned company there may be a veeeeeeery slim chance that the Italian government will step in, but in the extremely unlikely event that that would happen, they would likely only indemnify Italian customers.

[ Edit: Edited on Apr 16, 2008, at 12:17 AM by bentivogli ]

4. Posted by Sam I Am (Admin 5588 posts) 8y

It seems to me that every time a 'normal' airline goes bust (as opposed to the low cost ones), that they just keep on flying. In the US it seems sometimes like there's not one single airline which hasn't filed for bankruptcy some time in the past 10 years....

5. Posted by GregW (Travel Guru 2635 posts) 8y

That being said, Sam, there are at least 4 airlines that have gone belly up in the past week (3 of them American, 1 from Hong Kong) who just stopped flying, and it looks like those consumers are SOL.

Alitalia is unlikely to stop operating. It is the national airline in Italy, and the PM Berlusconi has vowed that the airline will keep flying (source: Berlusconi vows to keep Alitalia flying). This might not keep an airline running long term, but it could keep them running for a while, giving the Italians time to find a solution to the money woes of their airlines. As Frank Zappa said, "You can't be a real country unless you have a beer and an airline. It helps if you have some kind of a football team, or some nuclear weapons, but at the very least you need a beer." Very few countries want to see their national airline disappear

Assuming Alitalia goes belly up AND stops flying completely, you won't be flying in June, at least not with them. You'll have to book a new flight on another airline, which will cost you money.

For the cancelled flight, Visa may cover you, depends on the type of the card. You'll have to check your card holder agreement. Similarily with STA, they may cover you, depending on the conditions on the ticket, but I wouldn't count on that.

There could be a difference between the cost of your original flight (bought with lots of advance purchase) and the new flight (bought last minute). The only likely candidate to reimburse you for that difference would be travel insurance. Given that your insurance company isn't willing to cover you for the loss of the original ticket, I am sure they wouldn't reimburse you for any additional costs.

Frankly, it's a crappy situation.

If your ticket is fully refundable, the best bet might be to cancel the ticket, get the refund and book with someone else.

If your ticket is not refundable, then you just really have to wait it out and hope that the airline has enough cash to keep running through June, or that the government gives them some manner of financing to keep them going.

Sorry to be the black death,
Greg

6. Posted by LittleMad (Full Member 42 posts) 8y

I wouldn't trust Berlusconi word at all, it's a really Mafia man.

I would contact Alitalia, and ask them what are the risks. In the case that it looks not a favourable situation, than get the refund and find another company to flu with.

7. Posted by Lavafalls (Travel Guru 155 posts) 8y

The big question is whether Alitalia plans to keep flying or not. If they plan to liquidate (means shut down completely and sell off the parts) you are in a bad spot. If they plan on just canceling their debts then you might be ok. I would just see if you could move your tickets and go your vacation next week if possible and roll with the punches.

8. Posted by Utrecht (Moderator 5595 posts) 8y

Don't worry, KLM/Air France or otherwise Aeroflot will keep Alitalia flying;)

9. Posted by imhallie (Budding Member 4 posts) 8y

Quoting Ed83

Anybody up on their consumer rights?! I booked an Alitalia flight to go to Argentina in June and it now looks as though the airline will may well have ceased operating by then as are that broke they can't continue flying. So does anyone know what happens in this instance? I booked at a UK branch of STA travel using a VISA credit card. My insurance company said I wouldn't be covered with them. I heard rumour that STA may be responsible as they are part of the ATOL scheme or maybe even VISA.

Does anyone have any experience of this?

Many thanks, Ed

you should contact the airline you will be travelling with and request for the refund.... if a certain airline is no longer operating, customers do have the right to demand for a refund or a reaccomodation....

hope this helps.... have a great day!

10. Posted by jimbo77 (Budding Member 2 posts) 8y

Nation Wide in South Africa went belly up, it did not help one of there air craft lost an engine last year people were given no notice, they still sold tickets an hour before the doors closed. Does IATA have any say???