About 50 airlines have collapsed since the start of last year and many are feeling the effect of the economic downturn.
More operators could be at risk of going into administration as business and leisure customers cut back on travel and companies transport less cargo.
How can you avoid being stranded and out of pocket if things go wrong?
There are a number of safety nets in place to provide passengers with help and compensation.
But an increasing number of consumers are opting to book flights directly from airlines rather than through an ATOL-bonded tour operator or an Abta agent – and then may find they are unprotected.
Directgov, the UK Government’s website which provides information and online services for the public, says if you booked your flights as part of a holiday package – such as where accommodation and travel are combined in one transaction – through an ATOL-licensed agent or airline, you should be protected by ATOL (Air Travel Organiser’s Licence).
Some airlines offer flight and accommodation or car hire, sometimes through website links to other independent sites. These are often separate purchases from a different company, and will not count as a package holiday. It is up to the customer to check whether their tour operator has an ATOL licence, which can be done by looking on the Civil Aviation Authority's website at www.caa.co.uk/atol
For those who have booked through a member of ATOL, if an airline goes into liquidation, a full refund will be given to holidaymakers who have yet to travel and arrangements will be made for those stuck abroad to fly home. Passengers booking a seat-only fare on a charter airline and scheduled flights bought through ATOL- licensed travel agents will also be covered.
If tickets are bought directly from the airline and it subsequently goes bust, the situation is less straight-forward. Consumer Direct advises that if you pay more than £100 and up to £30,000 using a credit card, you should be able to claim the money back from your card issuer under the Consumer Credit Act (1974).
Airline failure may be covered as standard on your regular travel insurance.
However, research shows 87% of annual and single travel insurance policies do not provide cover for scheduled airline failure at all. Just over 11% of policies provide scheduled airline cover as standard and less than 1% of annual policies and just under 2% of single policies provide optional cover for an extra cost. If you are not protected by one of the above measures, you will be an unsecured creditor and to attempt to get your money back from the airline you will have to contact the official receiver through the Insolvency Service (0845 602 9848, www.insolvency.gov.uk).
Mark Gettinby is with Intune, the financial product and service provider that gives all its profits to Age Concern and Help the Aged.