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Arthur Frommer: If Thomas Cook Can Go Belly-Up, Consumers Must Protect Themselves | Frommer's  

Arthur Frommer: If Thomas Cook Can Go Belly-Up, Consumers Must Protect Themselves

The recent shutdown of service by the venerable Thomas Cook company in Great Britain, stranding tens of thousands of tour passengers, is a wake-up call for all of us.  
It means that we cannot rely on the sterling reputations of airlines/tour companies, no matter how long they have been in business (Thomas Cook was more than 150 years old).
The other object lesson? It has become necessary to spend additional funds in advance of a flight or tour on an insurance policy protecting against bankruptcy of the airline or tour operator.  
About the only instance in which that insurance policy may not be necessary is a flight to be operated by a state-owned airline like Air France or Lufthansa. No tour company, however, is apparently owned by any government, and must therefore be the proper subject of insurance.
The non-government-owned tour companies or airlines pose risks. Several smaller European airlines have all terminated operations within the past few months, and although most of them are companies of which you probably haven’t heard, their number includes the well-known XL Airways of France, which recently suspended ticket sales—whether it will eventually restart operations isn’t yet known.  
As for the much-lamented WOW Airlines, though it will apparently begin flights between Washington, D.C. and Iceland, it hasn’t yet announced whether it will eventually again fly between Iceland and various European destinations.
What has caused the shakiness of so many airlines and tour operators?  
For one thing, the recent attack against oil refineries in Saudi Arabia will undoubtedly lead to a considerable increase in the cost of aviation fuel.  
The problems of airworthiness of Boeing’s 737 Max are another factor causing much concern. 
And a gradual slowing of the world’s economies is still another factor making travel operations difficult.

The lesson remains: Be sure, in planning a vacation trip, to secure protection by insurance against the bankruptcy of the smaller airline or tour operator with which you are about to book.