The recent disruption caused by British Airways cancelling all flights due to an IT problem has left thousands of passengers potentially out of pocket as their holiday plans are left hanging in the balance.

On top of the flights themselves, hotel and hire car reservations are forced to be unfulfilled leading to cancellation fees and/or loss of deposits in many instances.

As a basic entitlement, airlines are obliged to look after passengers affected by disruption by offering expenses to cover for hotels, transport and food until they can reach their destination. However, if this is not a viable option for those travelling, under EU passenger rights you are entitled to cash compensation on a cancelled flight depending on the length of the trip.

The Civil Aviation Authority takes the view that passengers should be re-booked on other carriers if no convenient alternative is available on the airline that caused the disruption in the first place. However, this is not a mandatory course of action so an airline can decline this offer (as BA have done in this instance). If passengers decide to find alternative flights themselves but have a return ticket with the other airline, this may cause problems as they are recoded as a ‘no-show’ going out, meaning the return leg is cancelled.

Further compensation can be sought under the Montreal Convention which gives passengers additional rights to recover financial losses which have been directly caused by an airline’s failure to get them to their destination on time.

When it comes to the other aspects of a holiday, there will be differing policies depending on the company you have booked with. In general, hotels will charge a cancellation fee depending when they are notified. 15 days or more prior to the date of arrival incurs a 10% charge; 3 to 14 days’ notice will incur a two-night charge. Of course, there are always exceptions to these instances so always check before you book.

For car rental companies, there tends to be varying rules and regulations when it comes to cancelling a booking or a ‘no-show’. Some only charge a cancellation fee and will refund you the rest of your fee, whereas others will keep the full amount if you have prepaid. Like the hotels, a lot of this depends on when you notify them. With cancelled flights the chances are it will be less than 24 hours’ notice which inevitably will leave you out of a pocket in some way. Again, check thoroughly before making a booking.

Before you travel anywhere, take out comprehensive travel insurance to cover all eventualities. Or if you already have cover in place make you check the terms and conditions so you know what is both covered and not covered to avoid any nasty surprises should you need to claim.