Cease of airline-operations

Below, information regarding the rights of passengers and travel agencies in case of an cease of airline-operations can be found. Regulations and rules differ when a airline ticket is bought separately or as a part of a package tour. 

Key points:

  • The legal status of passengers differs depending on whether the flight is part of a package tour or whether an individual ticket has been purchased.

  • If a flight is a part of a package tour, the seller of the package tour is responsible for bringing his passengers to their destination and back again.

  • Those who have purchased a package tour or are already traveling in a package tour arrangement, and part of the trip is with an airline that stops operations, should contact the seller of the package tour for more information.

  • Those who have bought a package tour directly from an airline that stops operations, or are already on a package tour purchased by the company, can contact the Icelandic Tourist Board via the email address mail@ferdamalastofa.is or the agency's online chat here on the web.

  • If a passenger has purchased a single ticket, and is abroad when the airline stops operating, he is responsible for returning home himself and at his own expense.

  • Those who have purchased individual airline tickets from an airline that stops operations are advised to contact their credit card company, if they have paid for the airline ticket with a credit card. They can also make a claim in the bankruptcy estate of the airline in question.

The sale of package tours is governed by the Act on Package Tours and Interconnected Travel Arrangements no. 95/2018. The sale of package tours is a licensed activity according to Act on the Icelandic Tourist Board no. 96/2018. Only those who have issued a permit from the Icelandic Tourist Board may sell package tours.

Responsibility of the suppliers of package tours

A seller of a package tour is responsible for ensuring that the passenger receives what he pays for, i.e. a seller is responsible for the correct execution of the trip. This means that he is responsible for bringing his passengers to their destination and back again. In the event of the bankruptcy of an airline that only handles the flights in the package part of a package tour, the seller is obliged to provide his passengers with another flight to bring them to their destination or back if the journey has begun. Other remedies are subject to the Act on Package Tours and Interconnected Travel Arrangements.

A seller of a package tour, who has to provide his passengers with another flight to fulfill his obligations, may have a general claim in the bankruptcy estate of an airline in the event of its bankruptcy. If a seller of a package tour purchased the flights of the trip with a credit card, a seller can check his right with his credit card company.

For further information on the implementation of package tours, the Consumer Agency can be contacted. It can be contacted by phone +354 510 1100 or it can be reached with an e-mail to postur@neytendastofa.is

Insurance for the sale of package tours

The sale of package tours is subject to insurance. A seller of package tours must therefore have insurance in case of the event of bankruptcy. The insurance is intended to reimburse payments that have been made for a package tour that is not carried out in accordance with the contract and for the return of passengers if the passenger transfer is part of a package tour, in case of the event of the seller's bankruptcy.

Contingency plan 

The Icelandic Tourist Board has established a contingency plan regarding the implementation of insurance for the sale of package tours in the event of an airline ceasing operations.