Passengers urged to take personal responsibility as insurance is unlikely to cover flight cancellations caused by fuel shortages, the Ombudsman warns.
Airlines adjust flight schedules as rising fuel costs put pressure on operations and force capacity changes.
Family left out of pocket after airline cancels return flights due to “operational requirements,” forced to pay more for alternative tickets after initial refund, Ombudsman case reveals.
The insurer refuses payout on the cancelled-flight claim, citing policy exclusions for transport provider cancellations unless caused by mechanical failure or industrial strike action.
The ombudsman backs the insurer after reviewing the complaint, finding no evidence the flight cancellation met the policy’s covered events, leaving the family’s claim rejected under policy terms.
Insurance and Financial Services Ombudsman Karen Stevens warns travel insurance often does not cover airline “operational” cancellations, highlighting limits in standard policies that can leave travellers exposed.
“Cover is usually limited to clearly defined situations such as severe weather, industrial action, or mechanical failure.”
“If those circumstances don’t apply, there may be no cover.”
She said travellers should understand that airline cancellations driven by fuel price increases are typically treated as “operational” decisions and therefore are usually not covered under standard travel insurance policies.
“If your flight is cancelled, your airline will usually refund you or give credit for the cost of your original flights.”
“However, if the only alternative flights available cost more, you may have to pay the difference yourself. We could start to see this situation happening more if airlines continue to reduce flight schedules and cancel routes in response to higher fuel costs.”
Stevens advised travellers to carefully review the cancellation and delay terms in their insurance policies and confirm the specific reason for any flight disruption before lodging a claim.
“Travel insurance can be very valuable, but it’s important to have realistic expectations about what it covers,” she said.
Understanding your policy before you travel can help avoid unpleasant surprises.”