Direct Line introduces cover for financial failure of airlines

Flyglobespan is the latest airline company to go bust leaving thousands of people stranded abroad. In fact, in the last two years over 60 airlines have gone out of business leaving passengers out of pocket for the cost of their travel or accommodation.

Direct Line is one of the few travel insurers to address this issue by including airline failure cover to their travel insurance products. Direct Line's travel insurance policies will now protect customers from financial loss should their airline go bust. It also includes cover for the failure of hotels, villa rental companies, car hire companies, ferry companies, theme parks, excursion providers and many more.

The new protection will also cover the cost of a return flight in the case of an airline collapse whilst the customer is on holiday. This is not included in the protection provided for credit card purchases under the Consumer Credit Act.

Jennifer Thomas, spokesperson for Direct Line travel insurance, said: "Holidaymakers are understandably looking to spend less on travel these days, and booking directly with airlines and hotels can be a good way of getting more while spending less. However, this means that it is now more essential than ever to have insurance in case these firms fail, as there is no protection from schemes such as ATOL or ABTA if booked direct.  With our updated travel insurance policies, our customers can now travel with increased peace of mind, knowing that they will be covered in the unfortunate event of a supplier's collapse."