First things first
The first thing to do if you hear that your airline has gone bust is to contact your travel agent – if you booked with one – to see if your booking is still in place. If it is, then your travel arrangements should be relatively unaffected. You may have to change flight times, but your holiday or trip should proceed as before. If not, you’ll need to check your documents to see if you’re ATOL-protected.
There are certain rules as to whether you’re ATOL-protected if you have booked your flight, hotel and car hire separately. If you booked your flights and accommodation on the same day, or within a day either side, and if the company you booked with is ATOL-registered, then you’re protected and can apply to the Civil Aviation Authority to reclaim your money. This also applies if you booked your flights and car hire together. However, if you booked flights and accommodation directly with the bankrupt airline then you won’t be covered.