I confess, I've always been drawn to the little guy. I like going to locally owned restaurants over the chains. I chose Alterra Mountain Co.'s Ikon ski pass this year over Vail Resorts' Epic pass, primarily because Ikon was the upstart going against an incumbent. And yes, I also find myself rooting for startup and small airlines. They add competition in the marketplace and are good for consumers.
So, it goes against my nature to advise caution before booking on new-entry carriers as well as on airlines that are having financial difficulties. But recent events have led me to conclude that I'll be doing exactly that myself.
The latest small airline to collapse was the Icelandic discount carrier Wow Air, which abruptly halted service on March 28, reportedly leaving more than 1,000 customers stranded at airports and many more either stuck miditinerary without a return ticket or suddenly in need of a new ticket for upcoming travel.
But Wow is far from alone. The list of European carriers to have collapsed since late 2017 includes Air Berlin, Monarch, Germania, Small Planet and Primera Air, which briefly competed against Wow in the discount transatlantic sector. Stateside, regional carrier Great Lakes Airlines went out of business last year, as did Pittsburgh-based OneJet. Early this year, start-up California Pacific closed after just two months in the sky.
None of which means it's innately a risk to schedule travel on small airlines. Some are financially healthy. But it is prudent to factor in uncertainty before making bookings on startup carriers. It's also worth keeping abreast of industry news. This year, for example, money-losing discount carrier Norwegian Air is scaling back growth and consolidating bases. The company also put out a $353 million rights issue in January in an effort to bolster its balance sheet.
I certainly hope Norwegian survives. It has been a transformative force over the past five years in a transatlantic aviation market dominated by the three major alliances. But if I buy a Norwegian ticket soon, I'll take the precaution of purchasing travel insurance.
As Brett Snyder, owner of the air travel service Cranky Concierge, told me recently, the fact that an airline is having difficulty isn't necessarily a reason not to fly it. But those difficulties are a factor to consider alongside the usual concerns of price, schedule and service.
Travel advisors who do book clients on struggling carriers might consider working with a service like Cranky Concierge, which for a nominal fee will monitor a client's itinerary for routine issues like flight delays and will also take on the task of rebooking for more serious events, including an airline going under.
Another important point: When purchasing travel insurance, read the fine print to make sure it covers a closure.
Conventional wisdom also says that travelers should purchase air tickets with a credit card, in part because they can then dispute the charge through the credit card company in the case of a grounding. But for bookings through the agent channel, the opposite is actually true, ARC senior airline participation program manager Gena Crowe said. That's because when an airline joins ARC, it is required to post financial guarantees based upon sales volume. When an airline collapses, ARC uses those guarantees to make direct reimbursements to travel advisors on cash transactions.
All Wow customers who paid in cash through the U.S. agent channel will be reimbursed, Crowe said.