[irjustin]

I think there's a catch 22 here.

The instant the airline says "We're no longer accepting bookings because we're working to figure out a cash situation." you've got to believe everyone else who is still booked will pull their ticket for a refund of any form. I would be.

There would be a massive outflow of what little available cash exists.

The announcement whether early or late is the immediate death knell of the company.

I do agree at face value this seems terrible, but I honestly don't see a better course of action given they were waiting for a bailout and then didn't receive it.

[michaelt]

One could imagine a travel company that operated like a financial services firm - if you pay $3000 for a package holiday they put your money in a ringfenced client money account and contract with an airline and hotel to provide the services with payment in arrears.

That way if the travel company or airline or hotel goes out of business, the holidaymaker hasn't lost any money (although they might face the cost of buying a last-minute flight from a different airline, or similar)

Of course, you could argue consumers who want such peace of mind can already approximate such an arrangement by combining a package holiday with travel insurance.