Contingency plan and procedure in the event of bankruptcy, or insolvency, or cancellation of licence of a trader of package tours and liked travel arrangements

Coverage for buyers of package travel

Sellers of package travel and linked travel arrangements are obliged to hold a valid licence, according to the Act on the Icelandic Tourist Board no. 96/2018, and be members of the Travel Insurance Fund, pay premiums and provide a guarantee according to the Act on package travel and linked travel arrangement no. 95/2018.

Buyers of package travel therefore enjoy protection and can claim reimbursement from the Travel Insurance Fund in the event of bankruptcy, or insolvency, or the cancellation of a traders licence due to non-fulfilment of the traders obligations.•

• Definition of package travel
• Definition of linked travel arrangement

What does the protection entail?

The Travel Insurance Fund reimburses travellers for all payments made for the purchase of package travel or linked travel arrangement and handles repatriation of travellers if transportation is a part of the package travel.

The protection covers all travel related services that are a part of a package travel contract and includes:

• Reimbursement for all payments made towards a package tour that has not taken place, whether it has been paid in part or in full.
• Repatriation if transportation of is a part of the package travel contract.
• Enabling travellers to complete their travels according to package travel contract.

The Travel Insurance Fund does not cover:

• Additional costs that are not included in the package travel contract.
• Interests or other costs of making a claim.

If a traveller has been enabled to complete his travel according to the original package travel contract no further claims will be accepted.

The refund covers direct financial losses only, not inconveniences or harm.

Protection for linked travel arrangements covers: 

• Reimbursement of all payments made to the seller who facilitates the linked travel arrangement. 
• Repatriation if the seller facilitating the linked travel arrangement is responsible for transportation of travellers.

What do travellers have to do to get a refund?

Travellers must make a claim towards the Travel Insurance Fund for the refund of payments made for package travel or linked travel arrangement. Further information and instructions can be found here.

Legal rights of travellers who have bought a single airline ticket

The legal rights of travellers who buy a single airline ticket are different form the legal rights of travellers who buy package travel or linked travel arrangement. The sale of single airline tickets is not covered by obligatory guarantee as is the sale of package travel and linked travel arrangement.

Travellers can only make claims towards the bankruptcy estate for costs incurred as the result of bankruptcy or termination of an airline’s operation.

• A traveller who is abroad must return to his home country at his own costs unless the airline’s operation is carried on by the bankruptcy estate or the estate taken over by another airline. 
• If travel is paid in full but has not yet been made the traveller can make a general claim towards the bankruptcy estate.

If the ticket was paid using a credit card it is recommended that travellers check whether their credit card company will refund the ticket.

The Icelandic Transport Authority is responsible for administration and supervision of aviation, further information on the rights of air passengers can be found on their web.

Procedure

In the event of bankruptcy, insolvency, or if a licence is cancelled by the Icelandic Tourist Board due to non-fulfilment of obligations to the Travel Insurance Fund, the Icelandic Tourist Board publishes an announcement to that effect on the web www.ferdamalastofa.is.

Further information can be found under the section “licences and legislation.” Inquiries can be directed to claims@itb.isor the Tourist Board´s online chat.

• The Icelandic Tourist Board gathers information on tours in progress, the status of the tours and travellers on those tours and seeks cooperation with airlines and decides on the repatriation of travellers if applicable.
• If the requested information is provided travellers are informed of the state of affairs and the decision of the Icelandic Tourist Board.
• If the requested information is not provided travellers are advised to monitor the Icelandic Tourist Board´s website for information.

• Travellers currently abroad:
  Travellers pay for the cost of repatriation and can make a claim towards the Travel Insurance Fund for the cost. Travellers should seek to travel economically. The Icelandic Tourist Board seeks cooperation with airlines in order to make repatriation of travellers smooth in terms of priority seats, favourable pricing, travel route, etc.
• Travellers within Iceland:
  Travellers arrange for their travel home at their own cost. Travellers can make a claim towards the Travel Insurance Fund for the cost of travel. The Icelandic Tourist Board will take no further action.
• Repatriation of travellers:
  When the Icelandic Tourist Board, on behalf of the Travel Insurance Fund, arranges for repatriation of travellers, the travellers can make no further claims. If travellers decide to take advantage of the repatriation, and hence cut their travel short, they can make a claim towards the Travel Insurance Fund for the services not delivered according to the package travel contract. If travellers, on the other hand, decide to arrange for their travel home at their own cost, they can make a claim towards the Travel Insurance Fund for the cost of the homebound travel.

Making a claim towards the Travel Insurance fund and time limit for making claims

The Icelandic Tourist Board publishes the cancellation of a licence and publishes a call to present claims in „Lögbirtingablaðið“, and in other prominent ways as deemed appropriate in each case.

Claims towards the Travel Insurance Fund must be presented to the Icelandic Tourist Board in writing. Claims must be supported by sufficient documentation to verify the claim, e.g. package travel contract, receipts or other documents that prove the purchase of package travel.

Claims must be presented within two months from the publication of the call for claims.

Claims are processed as soon as possible. The time it takes to process claims is dependent on the number and scope of claims and the clarity of the documents submitted.

The Icelandic Tourist Board approves, or refuses claims and informs claim holders formally about the decision of the Icelandic Tourist Board. The decisions of the Icelandic Tourist Board can be appealed to the Ministry of Culture and Business Affairs. Appeals must be made within 4 weeks from the date of the decision.