Bankrupt airline rumors and realities make budget travelers nervous, but many carriers in that situation reorganize and recover.
Not SkyEurope. The airline abruptly ceased operations on Sept. 1, 2009, just a few months after executives had sought protection from creditors.
Budget travelers enjoyed the low-cost Slovakian carrier's convenient routes and discount fares. But nothing was enjoyable about this announcement that appeared on the suddenly defunct airline's Web site:
"In case you have paid directly to SkyEurope in other means than credit card (e.g. bank transfer, cash), please be advised that a refund may not be possible."
SkyEurope sold vacation packages, too:
"If you are already at the destination or have rented a car through SkyEurope's business partner, you may stay at the hotel and use the vehicle during the period originally agreed. You must, however, order a return flight from some other airline at your own expense."
Victims were left with useless tickets, stranded in destinations across the continent. What can a budget traveler learn from this sad situation?
Lesson #1: Pay airfares with a credit card
Anyone who paid with a card was protected from the loss. In this case, many of the lost low-cost fares probably did not amount to huge individual debts for travelers. But as the statement reads, those victims wound up booking return fares at the last minute. While several other carriers did step in and offer reasonable fares, it hurts to pay for a trip twice and then learn no refund is in the mail.
Lesson #2: If you hold tickets on a faltering airline, keep up with news about that carrier, especially reduced service announcements.
There were plenty of warning signs SkyEurope was in deep trouble. For example, The New York Times reports SkyEurope service from Vienna had been halted two weeks prior to the shutdown because the troubled carrier had missed a debt payment deadline. It didn't take a thorough reading of the financial pages to find this: the airline's own Web site posted a news release Aug. 14 announcing Vienna flights would temporarily be operated out of Bratislava.
Lesson #3: Exercise more caution with smaller airlines.
While it's true that a large airline can collapse just as quickly as a smaller operation, large carriers usually offer a bit more stability. SkyEurope's monthly customer base was frequently under 200-thousand passengers. Reports on its Web site indicated passenger loads in the 75 percent range -- hardly the stuff of healthy profit margins. With fewer seats and lower load factors, it was difficult for SkyEurope to pull out of its economic nosedive, and there was little cash to pay creditors.
Lesson #4: If stranded, consider alternatives other than a return flight.
In Europe, it's often cheaper to fly than seek out ground transportation over long distances. That might not be the case in your situation. Take a look at train schedules and car rentals.
Lesson #5: If in doubt, check on low-cost travel insurance
You can buy travel insurance that covers you in the event your provider defaults. It's best to read the fine print before purchase, no matter how painful the process. Many times, this type of coverage is only worthwhile on larger package vacations or overseas airfares.
