Headlines earlier this week, told the tale of WOW Airline’s financial difficulties that left thousands of passengers stranded and desperately searching for last-minute flights and/or rescue fares. As such, I thought it would be helpful to give a list of my favorite resources for checking the financial health of an airline before booking a flight deal.
If you have a copy of the Travel Becomes Me 2019 Directory of Low-Cost Airlines, you know that I mention that it is important to check the financial health and safety ratings of low-cost airlines before booking with them. A couple of weeks ago we spent some time discussing safety review tools and now it is time to talk about some of my favorite airline financial health tools because apparently, these airlines would really like to keep us on our toes.
4 TOOLS TO CHECK AIRLINE FINANCIAL HEALTH
IATA Airline Financial Health Monitor
- The International Air Transport Association is the largest airline trade association and they publish quarterly reports on the financial performance of airlines in the Airline Financial Monitor. This tool is not as straightforward to use because it provides aggregate data rather than airline by airline data. Nonetheless, it is a good resource for getting a general sense of whether airlines may face financial hurdles in the near future because their information tends to be based on information provided directly by its member airlines.
Publicly Available Airline Investor Reports, Notices and Press Releases
- These materials will generally be available on the related airline’s website and provide a good way of seeing whether an airline is in declining financial health. Reports will usually tell you financial performance relative to prior periods. Notices and press releases will usually tell you if there has been a significant event (including events involving deteriorating financial condition) that you should consider before booking a flight.
Credit Ratings
- Credit Ratings tell you an airline’s financial health and whether they are generally able to meet their debt obligations. Ratings are not available for every airline but if they are available, recent rating releases about rating downgrades for the airline you are seeking to book a flight deal with are usually a good sign that the airline may be facing some financial difficulties.
Google Searches
- Google Searches – When all else fails, a good “old fashioned” google search will typically reveal if there are news reports about an airline’s financial struggles. I usually use this tool as a last resort though because usually by the time financial struggles hit major news publications, the airline is already in crisis and so is the purchase price you paid to them for your ticket.
If All Else Fails, There is Always Trip Cancellation
Lastly, while I’m not a big fan of trip cancellation insurance, this is the one case where I am usually willing to make an exception. If the financial condition of an airline seems iffy, Travel Insurance may be a good failsafe. Just be sure that before you get Travel Cancellation Insurance that you carefully read what is actually covered. You will want to make sure that the insurance coverage offered will be sufficient to cover any losses you incurred as a result of a flight cancellation (and the cost of any replacement tickets that you have to purchase as a result of the flight cancellation).
Hope the above was helpful! Are there any particular tools you use to check the financial health of airlines before booking your flights? Let me know in the comments.
