The aviation industry is failing to provide passengers with adequate protection if airlines fail, according to a report by the Air Travel Insolvency Advisory Committee (ATIPAC). ATIPAC, which advises the Civil Aviation Authority, called for an end to the current system in which scheduled airlines are able to operate without offering passengers the same financial security that package holidaymakers enjoy, through the Air Tour Organiser’s License (ATOL) system. Passengers flying as part of a package holiday with ATOL-protected operators automatically have a £1 charge added to the price of their holiday, which contributes to a regulated travel insurance fund. The news comes in the wake of a report by Blue Oar investments claiming at least 50 European airlines face bankruptcy if the current decline in the aviation industry fails to improve. Rising fuel costs and the worldwide credit crunch have already seen at least 25 airlines go bust this year, including Silverjet, Eos, Maxjet, ATA and Oasis Hong Kong, while EasyJet, Ryanair and British Airways have announced cutbacks in flights this winter and falling profit in the last few weeks. So how do you you protect yourself when an airline or tour operator goes bust? Who or what is out there? Some insurers offer Passenger Protection Insurance sold separately or Dynamic Packaging Protection as part of a travel insurance policy but always check the small print if this is offered because these are quite often restrictive in their cover. You can reduce the risk further by organising your travel through companies and agents covered by ATOL or who hold bonding through an approved body, such as ABTA or AITO. ATOL stands for Air Travel Organiser’s licensing and is a protection scheme for flights and air holidays, managed by the Civil Aviation Authority (CAA) and protects the customer from losing money or being stranded abroad when a tour operator goes bust. All licensed firms have to lodge bonds with the CAA so that, if they go out of business, the CAA can give refunds to people who can’t travel and arrange for people abroad to finish their holidays and fly home. And ABTA? Members of the Association of British Travel Agents are required to provide financial protection for their customers which means that you can book your holiday knowing that if an ABTA member fails financially while you are on holiday, you can continue your holiday as planned. If your holiday has not started, then you will receive a full refund or be given help to make alternative arrangements for the trip to proceed. Likewise AITO, or Association of Independent Tour Operators to give it its full title, require their members to protect their customer’s money in the event of an AITO member going into liquidation. Above all of this, it is vital you have a comprehensive travel insurance policy incase the worth was to happen.