What is Provider insolvency?

Provider insolvency is the financial failure of an airline, hotel or agency, leaving booked services undelivered.

Also called: Airline failure.

How it works#

Statutory passenger rights become largely worthless then, because they point at a company that cannot pay. The routes that do work are a card chargeback, package travel insolvency protection, and claims against an agency that took the money itself. A mileage balance ranks as an ordinary unsecured claim and is usually a total loss.

Not to be confused with#

Insolvency is not the same as an ordinary cancellation: with a cancellation there is an enforceable claim against an airline that can still pay.

In German#

The German term is Insolvenz des Reiseanbieters. German version of this term

Related terms#

• Chargeback: A chargeback is the reversal of a card payment through your own bank when a paid-for service was not delivered or not delivered as agreed.
• Travel voucher: A travel voucher is credit with the airline offered instead of a repayment, redeemable only against that airline’s own services.
• Mile: A mile is the currency unit of a frequent flyer programme: a credit in an airline account that can be exchanged for flights and other awards.

Articles that use this term#

• What happens to your miles if the airline fails?
• What is a chargeback and when does it apply?
• Do you have to accept a voucher instead of cash?