Fear Of Failure There is a real possibility that the charter airline or tour operator will declare bankruptcy before or during your trip. It happens almost every year. Airline failure is less common and less disastrous. The tour operator probably still has the money passengers paid (he or she is obliged to keep it in an escrow account until the flight) and can make arrangements with another airline. A failure that occurs during a trip might necessitate a few days' delay while alternative arrangements are made, but it probably won't cost additional money.
TIP: Whenever you put down a big payment, ask if it's protected against operator failure--by federal law, state law, or by trade association. If there's no protection, consider buying trip-cancellation insurance (for about 5% of your payment). Or have your agent find an operator that offers adequate protection.
Tour-operator failure is more common and more serious. Tour operators are required to post performance bonds and place payments for flights in escrow accounts earmarked for air travel. If the operator fails before you depart, you should be able to get your money back. This is hardly an ironclad guarantee, because the performance bond seldom covers the entire cost of chartering the aircraft.
If the tour operator fails during your trip, you may be at least temporarily stranded. In a worst-case scenario, the charter airline refuses to carry you because the tour operator hasn't paid them. No other charter or scheduled carrier is obligated to honor the ticket or has anything to gain by doing so. You are then faced with a delay of perhaps several days, the increased expense of obtaining another ticket, and little likelihood of ever receiving a full refund. Eventually the tour operator or airline may rescue you with some alternative arrangement. But this could take several days and if you're in a hurry to get back, you may have to pay the price.
If you have qualms about a tour operator's reliability or solvency, contact your local Better Business Bureau. To find out whether any enforcement complaints have been lodged against a tour operator or charter airline, contact the Department of Transportation in Washington, DC, at 202-755-2220.
Whenever possible, pay for charter flights with charge cards. In case of problems later, you can withhold payment or try to get a refund through the charge-card company.
If you can't put it on plastic, make sure your check is made out to the escrow or trust account U.S. operators are legally required to establish for each charter program. If you make the check payable to the individual tour operator, you diminish your chances of receiving a refund in case of failure.
To protect yourself against airline or operator failure, you can buy "travel protection" or "trip interruption" insurance from a travel agent or tour operator. Insurance costs around $5 per $100 of protection, but some travel agencies offer it as a free perk for buying through them.
In any event, when flying a charter be sure to have the financial wherewithal-charge card, traveler's check, cash-to buy your way home in an emergency.