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Thomas Cook collapse: your questions answered

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Via Yahoo Finance

The collapse of Thomas Cook is the biggest failure ever of a UK package holiday company, and leaves approximately 150,000 British holidaymakers stranded abroad – and many more with holiday bookings that will never take off. If you are among the many affected travellers, what happens now?

Firstly, the Civil Aviation Authority has advised those affected to visit http://thomascook.caa.co.uk. For those overseas, the number to call is +44 1753 330 330. The UK Freephone number is 0300 303 2800.

If you are abroad on a Thomas Cook holiday, will you be flown back home?

Yes, according to the foreign secretaryl, Dominic Raab, who told the BBC that contingency planning was in place to make sure no-one would be stranded. The repatriation plan, which has been codenamed Operation Matterhorn, will involve planes chartered from other airlines including British Airways and easyJet. The operation is likely to be a mammoth challenge for the Civil Aviation Authority, on a scale significantly larger than the last major collapse, when Monarch Airlines was grounded in October 2017.

Related: Thomas Cook travel chaos: insolvency leaves 150,000 stranded on holidays – live updates

The initial advice is likely to be that holidaymakers should not make their way to the airport until notified, as flights are unlikely to be available immediately. Be prepared for possible delays, and the risk that you may be flown back to a different UK airport to the one you took off from, then bussed to your initial departure point.

However, the good news is that the Monarch rescue went relatively smoothly. Over the course of two weeks in October 2017 the CAA chartered 560 flights from 24 different airlines, and 98% of Monarch passengers were flown home on the same day they were originally booked to return.

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The hotel you are in wants you to pay extra. What should you do?

Hotel groups are generally paid by the tour companies 60 to 90 days after the travellers have already taken their holidays. Now that Thomas Cook has collapsed, some hotels may ask holidaymakers either to leave, or pay extra to remain in the hotel.

The CAA said it was contacting hoteliers and other companies likely to be affected by the Thomas Cook collapse to assure them they will be paid. It added that “if holidaymakers are being asked to settle bills they should contact us and we will deal with it.” Thomas Cook package holiday customers are covered by Atol – Air Travel Organiser’s Licence – which protects accommodation and return flights.

You have a booking with Thomas Cook for a holiday next week. What happens to it?

It’s very likely you won’t be jetting off to the sun, but you will get the money back that you paid for the Thomas Cook holiday. The CAA will set out how to make a claim for a refund – go to caa.co.uk/atol-protection/

In some circumstances, Atol may appoint what it calls a “fulfilment partner” to provide the holiday instead, although this is more likely for holidays booked further in advance.

Are you covered if you have bought a flight-only deal on Thomas Cook Airlines?

Unlikely. Atol was set up to protect holidaymakers who buy package deals, not people putting together holidays on their own over the internet. But there can be some exceptions, such as if the passenger bought the ticket through an Atol licenced travel agent. However, if you booked directly with the airline it is unlikely you will be covered. When XL crashed in 2008, the CAA said flight-only customers were at the back of the queue, and that while it would make efforts to organise cost-only seats, it would not offer any guarantees.

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If you are flight-only, will your travel insurance or credit card company pay up instead?

It depends if the policy includes cover for “scheduled airline failure insurance” (Safi) or “supplier failure”. If it does, you’re covered. But most cheap travel policies, including many that come as part of a packaged bank account, generally do not include this level of cover. if you have booked a flight on your credit card you are covered by the so-called “section 75” cover under the Consumer Credit Act. To be eligible, you need to have paid more than £100 for your flight, and used your credit card to book direct, although some card companies extend the cover to bookings via agents.

Is there a chance that Atol itself will go bust and you won’t get a pay out?

As at 31 March 2018 the Air Travel Trust fund, which finances Atol payouts, had a surplus of £170m, and a £400m insurance policy of its own in place to handle events such as the collapse of Thomas Cook. But it will still be a major test for the fund. The good news is that Atol is run by the government-backed CAA, so should it be overwhelmed with Thomas Cook claims, the government would be under intense pressure to step in.

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