11 July 2012
The case of Air Finland proved yet again that, in the event of a bankruptcy, travellers fall into two different groups based on whether they have purchased a package tour or organised their trip independently.
One of the questions that came up in connection with Air Finland's bankruptcy was why not all travellers were able to return to Finland on return flights arranged by the Finnish Consumer Agency, but rather had to arrange an alternative return flight at their own expense. Another question that arose was on why only some travellers were able to apply for compensation from the security held by the Finnish Consumer Agency.
A traveller’s rights depend on whether they have purchased a package tour or reserved flights and accommodation independently. A package tour generally consists of a combination of travel services purchased together, such as an all-inclusive holiday or a flight-hotel package.
The rights of a traveller, who has purchased a package tour, are based on the Package Travel Act as well as the general terms and conditions for package travel agreed upon by The Association of Finnish Travel Agents. These terms and conditions determine matters such as the right of cancellation, payment of fees and matters of compensation.
If a travel agency declares bankruptcy, a package tour customer shall be reimbursed for their trip from the security held by the Finnish Consumer Agency. If a bankruptcy occurs during a holiday, a return flight shall be arranged for the traveller.
In the case of Air Finland’s bankruptcy, travel agencies Aurinkomatkat, Finnmatkat and Tjäreborg assisted the Finnish Consumer Agency in arrangement of return flights for over one thousand Air Finland Holidays package tour customers in numerous destinations as well as handled ground services on behalf of the Finnish Consumer Agency.
The scope of protection for a consumer, who only purchases flights, is more limited. For example, a consumer cannot cancel their flights or a cancellation is only possible under certain limited circumstances. According to the rights of air passengers in the EU, a consumer may be awarded compensation for a cancelled or delayed flight, but not in a case of bankruptcy. The traveller shall pay for any excess costs incurred due to the bankruptcy from their own pocket, including a return flight or accommodation.