THE collapse of two more airlines – Spanair and Malev – has underlined the risks for holidaymakers who prefer to make their own travel arrangements, say leading tour operators.

Derek Moore, chairman of the Association of Independent Tour Operators (AITO), says: "Airlines are no less subject to the current economic climate than the rest of us, as this little spate of collapses just goes to prove.

"It is clear to AITO and its nearly 150 ATOL-protected tour operator members that it's imperative for airlines to be brought within the ATOL legislation as soon as possible to protect the public, clarify the rules and create a level playing field."

Five years ago, AITO urged the Government to levy £1 on every passenger leaving the UK on outbound flights to build a fund to protect all passengers leaving the UK against future airline failures.

But the move was blocked by bigger airlines, including BA and easyJet, partly because they didn't want to build a pot of money to bail out weaker rivals if they hit trouble.

Noel Josephides, at Sunvil Holidays, says: "At the moment, many travellers who book flights direct with airlines can protect themselves by using their credit cards, but if everybody does this to cover these risks, card companies will soon run scared.

"By contrast, when you book a flight as part of a package, if an airline fails, the tour operator must reinstate your flight booking with another carrier, at no extra cost, or refund the money you originally paid.

"Scheduled airlines say that if an airline fails, then passengers can rebook, at a concessionary rate, with another airline. But under the ATOL scheme, passengers have nothing extra to pay."

Some travel agencies specialising in DIY holidays, including long-haul specialist Trailfinders, offer Scheduled Airline Failure Insurance (SAFI) to guard travellers against company failures.

Josephides says: "Some insurance policies cover the sum initially paid out, rather than the actual costs of getting home; if you bought a £40 return flight to Malaga with an airline which collapsed, the policy might repay £40 – though it might cost £220 to get home from Malaga.

"When airlines collapse, rival airlines often bump up their fares, because stranded travellers have little option."