My airline stopped flying: what protects the money you paid
An airline gone bust refund is never automatic. Spirit Airlines cancelled every flight on 2 May 2026 and began an orderly wind-down; what you can still get back turns on how you paid and whether the airline is insolvent, stopped flying, or both. If your airline is still flying but only delayed or cancelled one flight, trip delay insurance vs airline duties and your refund or voucher choice cover that ground instead. This page is for when the airline itself has stopped.
Spirit Airlines cancelled every flight on 2 May 2026 and began an orderly wind-down; what you can still get back turns on how you paid and whether the airline is insolvent, stopped flying, or both. If your airline is still flying but only delayed or cancelled one flight, #Is a stopped airline the same as a bankrupt one?
2 May 2026 is when Spirit Airlines cancelled every flight, eight months after it filed for Chapter 11 protection on 29 August 2025. Lufthansa CityLine’s flights ended on 18 April 2026, yet the European Commission’s list of operating licences still carried CityLine on 19 May 2026.
Lufthansa CityLine’s flights ended on 18 April 2026, yet the 
European Commission’s list of operating licences still carried CityLine on 19 May 2026.Stopping and going bankrupt are different facts, and neither implies the other. The company’s own filed statement is the primary source for Spirit: its Form 8-K exhibit read, “the Company has started an orderly wind-down of operations, effective immediately. All Spirit flights have been cancelled, and Spirit Guests should not go to the airport.”
CityLine shows the other half of the problem. An operating licence can still be listed after a carrier stops flying: a register records legal status, not a live timetable. Check both facts. Is your airline actually flying? Has an insolvency process begun instead? A listed licence answers neither question. Lufthansa's card carries the CityLine story; Spirit’s card carries its bankruptcy in full. This page treats Spirit as the one worked example.
LufthansaA UK261 or EU261 claim runs against one target. The operating carrier. Never a travel agent, never a booking site. No source we have found settles how, or whether, an unpaid claim gets paid once the carrier has failed. Do not expect it to happen automatically.
#Does ATOL protect a flight you booked with the airline?
12 months is how long you have to submit an ATOL claim once a failure happens, but a flight bought from the airline itself, with a valid e-ticket in exchange for payment, was never covered by ATOL in the first place, the CAA says plainly.
CAA says plainly.“If you purchase an airline ticket from an airline or travel business and you receive a valid ticket in exchange for payment, ATOL protection does not apply to this type of flight sale,” the CAA states. Flight-only ATOL protection does exist, but you would know it: “you will not receive a valid e-ticket in exchange for payment” if that protection applies, only an ATOL Certificate.
ATOL is not a disruption remedy either way. The CAA is explicit that “you will not be able to submit an ATOL claim for a cancelled flight,” and its exclusions rule out cancellations, delays and missed flights entirely. In the CAA’s words, ATOL “is financial protection when you book a package trip that includes a flight.” The legal boundary behind this: under the 2012 Regulations the operator of the aircraft may sell its own seats without an ATOL, and its appointed ticket agent is exempt too, outside a package, and must supply a confirmed ticket immediately on payment.
Claims must reach the CAA within 12 months of the ATOL holder’s failure; after that, ATOL takes no claim, and the CAA points you to the company’s appointed Insolvency Practitioner instead.
Check your booking confirmation first. Look for the words “ATOL Certificate,” not an e-ticket, before you assume any protection at all.
#Can your card issuer refund a flight when the airline has failed?
0 days is the waiting period Visa allows once the merchant is insolvent or bankrupt. The normal 15-day wait disappears entirely. Mastercard reaches the same point by another rule: the issuer may charge back immediately once it learns the merchant will not provide the service, including because the merchant is no longer in business.
Both schemes apply their chargeback rules to debit cards as well as credit cards, so a debit-card payer is not shut out of this route.
Section 75 is a different question, and it is genuinely open. The statute makes your credit-card issuer jointly and severally liable with the supplier for a claim of misrepresentation or breach of contract, but no judgment we have found decides whether that liability survives once the supplier itself has gone. Section 75A opens where the supplier “is insolvent.” But it only covers a linked credit agreement financing one specific purchase above £30,000, not the ordinary credit-card booking most readers have. Do not treat “the airline is gone” as itself a reason a section 75 claim succeeds. No authority we have found says so. None says the opposite either.
The statutory route, the thresholds, who can claim, how a third-party booking can break it: all of that sits on the section 75 and chargeback page.
Raise the chargeback first, naming the airline’s insolvency. Send a section 75 letter too, if you paid by credit card. Treat it as an open question, not a guarantee.
#What if the travel agent or tour operator is the one that failed?
1 different Mastercard ground exists for exactly this failure. Travel services “arranged through an online travel agency or tour operator were not received and the travel agency or tour operator is no longer in business.” Spirit’s own 2 May 2026 statement told agency-booked passengers to go back to the agent, not to Spirit.
That ground is a separate condition inside Mastercard’s “Goods or Services Not Provided” chargeback, written for a failed intermediary rather than a failed airline. It needs supporting documentation from the person who made the booking, describing how the service was not received and that the agency or operator is no longer in business. A package holiday whose organiser fails runs on separate protections, set out in package holiday cancellations.
Whether the same booking supports a section 75 claim turns on who your bank’s arrangements actually ran with. Steiner v National Westminster Bank plc [2022] EWHC 2519 (KB) held that a payment routed through a trustee company, not the actual supplier, broke a section 75 claim. Whether the same result follows for an online travel agent is not decided by any judgment found, and this page does not predict it. The detail sits on the section 75 and chargeback page.
Spirit’s own SEC filing said guests “who booked flights via a travel agent should contact the travel agent directly to request a refund,” while it said card bookings would be refunded automatically. No source we have found shows whether those refunds were paid. The rest of Spirit’s failure sits on the Spirit Airlines card.
Contact the agent first, if you booked through one. Escalate to your card issuer once it confirms it cannot refund you, or has itself stopped trading, and do not let that wait run past your card’s chargeback window.
#What happens to passengers of a US airline in bankruptcy?
$3,800 is the most an individual passenger’s deposit ranks for as a priority claim in a bankruptcy case begun on or after 1 April 2025, under 11 U.S.C. section 507(a)(7). Anything above that figure is a general unsecured claim, with no priority at all in the case.
Spirit’s own case decides which figure applies. Its Chapter 11 petitions were filed 29 August 2025, after the figure had already risen from $3,350 to $3,800 under the Judicial Conference’s 1 April 2025 adjustment. The priority covers money deposited before the case began for services bought for personal, family or household use that were never provided.
Three things this page will not tell you, stated as findings, not silence. 14 CFR part 260, the federal refund rule for a carrier still flying, was read in full — the words “cease,” “insolvent” and “bankrupt” appear nowhere in it. The rule presupposes a carrier still there to pay. 49 U.S.C. section 42303, the number that circulates online as a stranded-passenger provision, is actually about cabin insecticide disclosure. And the only DOT page on an insolvent airline was last updated on 6 December 2012 and is about Vanguard Airlines' 2002 shutdown; no current DOT statement on carrier cessation was found, and no source we have found says another airline must carry a stranded passenger.
For a US airline that is still flying, the refund triggers are different; see US refund rules. For anything your card issuer does not recover, the claim sits in the bankruptcy case: Spirit’s filing names the U.S. Bankruptcy Court for the Southern District of New York.
US airline that is still flying, the refund triggers are different; see #What should you do in the first days after the airline stops?
12 months is the ATOL claim deadline, if what you hold is a certificate rather than an e-ticket. Note the failure date the day you learn of it, contact your card issuer immediately since insolvency removes the ordinary chargeback wait, and keep every message the airline or agent sent you.
Find your booking confirmation first. Check which document it is: an ATOL Certificate, protected only for what ATOL covers, or a plain e-ticket, which ATOL does not cover.
Write down the failure date exactly. It starts the 12-month ATOL claim window if you hold a certificate, and it is the date your card issuer needs to treat this as an insolvency case, not an ordinary dispute.
Contact your card issuer before you contact anyone else, and say plainly that the airline has stopped trading and, where it has, that it is insolvent — Visa drops its 15-day wait for an insolvent or bankrupt merchant, and a Mastercard issuer may charge back immediately once the merchant is no longer in business. If an agent, not the airline, took your payment, contact the agent first and only escalate once it confirms it cannot help or has itself stopped trading.
Keep everything in writing: the booking confirmation, the airline’s or agent’s own announcement of the failure, and every reply your card issuer sends. None of the routes on this page pay out on your word alone. What an airline gone bust refund comes down to is which document you hold and how fast you act on it.
General information, not legal advice. For your specific case, contact the CAA’s ATOL team, the Financial Ombudsman Service or Citizens Advice.
Citizens Advice.#Sources
- SEC EDGAR, Spirit Aviation Holdings Form 8-K, period 2 May 2026, Exhibit 99.1 (“Spirit Airlines Begins Orderly Wind-Down of Operations / All Flights Have Been Cancelled”) - sec.gov, checked 2026-09-20.
- SEC EDGAR, Spirit Aviation Holdings Form 8-K, filed 29 August 2025, item 1.03 (Chapter 11 petitions) - sec.gov, checked 2026-09-20.
- UK Civil Aviation Authority, What does ATOL protection mean and What ATOL doesn’t cover - atol.org, checked 2026-09-20.
- Civil Aviation (Air Travel Organisers' Licensing) Regulations 2012 (SI 2012/1017), regulations 9, 10, 13 - legislation.gov.uk, checked 2026-09-20.
- Consumer Credit Act 1974, sections 75, 75A - legislation.gov.uk, checked 2026-09-20.
- Steiner v National Westminster Bank plc [2022] EWHC 2519 (KB) (High Court, 10 October 2022) - caselaw.nationalarchives.gov.uk, checked 2026-09-20.
- Visa Core Rules and Visa Product and Service Rules, edition 18 April 2026 - usa.visa.com, checked 2026-09-20.
- Mastercard Chargeback Guide, Merchant Edition, 19 May 2026, chapter 2 — mastercard.com, read from the Internet Archive capture of 24 July 2026 - web.archive.org, checked 2026-09-20.
- 14 CFR part 260 (refunds), current text - ecfr.gov, checked 2026-09-20.
- US Department of Transportation, Honoring tickets of insolvent airlines (last updated 6 December 2012) - transportation.gov, checked 2026-09-20.
- 49 U.S.C. 42303 (use of insecticides in passenger aircraft), US Code 2024 edition - govinfo.gov, checked 2026-09-20.
- 11 U.S.C. 507 (priorities) - govinfo.gov, checked 2026-09-20.
- Judicial Conference dollar-amount adjustments, 90 FR 8941 (4 February 2025) - govinfo.gov, checked 2026-09-20.
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