The European Travel Agents’ and Tour Operators’ Association, or ECTAA, has called for mandatory airline insolvency protection in Europe following the Air Belgium bankruptcy, citing 8 million euros in outstanding passenger refund claims.
The association, in a press release on Thursday, said that travel intermediaries including travel agents and tour operators accounted for 5 million euros’ worth of refund claims that are now part of Air Belgium’s bankruptcy proceedings.
The travel and tour operators’ group, which represents 80,000 travel agents and tour operators in Europe, further added that the bankruptcy incident highlighted travel intermediaries’ exposure to massive losses in case of airline bankruptcies.
Air Belgium’s outstanding passenger refund claims
Air Belgium announced that it would stop all scheduled passenger flights to focus on cargo and aircraft leasing operations in Sept. 2023. After the European airline’s declaration of bankruptcy, the passengers refund claims for its cancelled flights became a part of its bankruptcy proceedings.
In the case of Air Belgium’s cancelled flights that were booked through travel intermediaries, the responsibility to provide alternate travel arrangements fell on these intermediaries. Hence, the travel and tour operators had to provide alternate arrangements to its passengers with no prospect of recovering the original cancellation claims from the Belgian airline insolvency.
The association said that this places an “unfair financial burden” on travel intermediaries, who would have to bear the losses following airline failures as airline tickets need to be paid upfront.
Frank Oostdam, President of ECTAA said:
“The Air Belgium bankruptcy is yet another stark reminder that the current system leaves both consumers and travel intermediaries exposed to unacceptable risks. Airlines must be required to provide financial guarantees to cover their liabilities in case of insolvency.”
The ECTAA emphasised rising airline failures, calling for government support for failing airlines in Europe in terms of travel intermediaries. It further stated that there have been around 1,200 commercial passenger airline failures in the past 25 years.
The Air Passenger Rights Regulation (Regulation 261/2004) revision is currently up for discussion in the Council of the European Union. The association has urged the council to take this moment to consider adding mandatory protection measures that guarantee airline ticket refunds for flight cancellations owing to an airline ceasing operations or going bankrupt.
Air Belgium’s bankruptcy explained
The Belgian airline was established in 2016 for long-haul flights connecting Belgium with Asia.
On Sept. 18, 2023, Air Belgium announced that it would end its scheduled passenger flight service by October 2023 to focus on cargo and aircraft leasing operations. This was in response to mounting losses as the airline had been facing major financial hurdles after the Covid-19 pandemic, including rising fuel costs and geopolitical issues. Air Belgium officially declared bankruptcy on April 30, 2025 after facing major financial struggles that it was unable to cope with despite strategic shifts.
Who should be responsible for providing passenger refunds in case of airline bankruptcies? Let us know your thoughts in the comments!
