Airline collapses have long haunted the aviation industry like a ghost in the fuselage. But now, in a sobering whitepaper that cuts through the turbulence, WEX has laid bare the financial fragility of travel intermediaries left stranded when carriers vanish into liquidation—and it offers a high-tech parachute in virtual cards.
Yes, the facts are as bracing as a headwind at cruising altitude: more than 1,200 commercial passenger airline failures have been recorded globally over the last 25 years. That’s roughly one every 7.5 days. Despite that grim cadence, many travel intermediaries—agencies, consolidators, OTAs, and travel management firms—still cling to outdated payment models like bank transfers, which offer all the protection of a wet paper umbrella in a financial storm.
WEX, the global leader in B2B travel payments, wants to change that narrative.
A Century Later, Still No Safety Net
“Airline failures are inevitable,” says Kristian Kish, Head of Insights and Growth at WEX. “Even after a century of commercial aviation, travel intermediaries remain financially exposed due to prepaid tickets and limited protections.”
Traditional safety nets—government schemes like ATOL in the UK or America’s patchy consumer protections—often exclude businesses altogether.
Virtual Cards: The Financial Seatbelt
WEX’s solution? Virtual Card Numbers (VCNs). And they’re not your grandmother’s credit card. These digital marvels carry embedded chargeback rights, allowing travel sellers to recover funds swiftly and cleanly when a flightless bird flops for good.
Since 2017, WEX has successfully recovered nearly US$60 million from 14 airline collapses, with full chargeback recovery typically arriving within weeks. There are no courtrooms or drawn-out bankruptcy dances, just rapid financial lifeboats for businesses otherwise left adrift.
“WEX is more than a payment provider—it’s a strategic safety net,” says Kish. “We help businesses reduce risk, recover quickly, and grow confidently in a volatile market.”
The Big Picture: Protecting More Than the Middlemen
Let’s be clear: this is no mere IT tweak. WEX’s model extends well beyond travel agents. It protects investors, end travellers, and even the humble taxpayer.
When Monarch Airlines collapsed in 2017, UK taxpayers footed a £40.5 million bill to repatriate 110,000 stranded passengers. That scenario might’ve looked very different had the travel intermediaries been equipped with reliable chargeback mechanisms.
“Chargeback protection has shielded not just businesses, but also prevented the need for costly taxpayer-funded interventions,” the whitepaper notes with surgical clarity.
Government Aid: A Temporary Painkiller, Not a Cure
You might wonder why airline collapses seemingly slowed between 2021 and 2024. After all, oil prices spiked again, inflation hit hard, and airline margins remained wafer-thin.
The reason? A flood of government support. Globally, airlines received a whopping US$243 billion in pandemic aid, much of which came from loans and guarantees, essentially keeping financial zombies afloat.
But that life support can’t last. Airlines still hover beneath their weighted average cost of capital, with net profits in 2024 averaging just US$6 per passenger. According to IATA’s Willie Walsh, the industry remains “squeezed between a fiercely competitive environment downstream and an oligopolistic upstream supply chain.” In plain English? Airlines are skating on financial black ice.
Patchwork Protections? A Bad Stitch-Up
The whitepaper skewers individual protection schemes as little more than Band-Aids. Many are levied on travellers, not insurers. They lack incentives for risk reduction, don’t price actual risk, and fail to address the financial fallout for businesses in the supply chain.
By contrast, WEX’s virtual cards offer:
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Guaranteed payments to airlines for valid bookings
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Automated chargeback recovery, often within weeks
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Real-time financial oversight, minimising reconciliation chaos
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Reduced supplier insolvency risk, strengthening investor and lender confidence
Chargebacks: Not Just for Dodgy Deliveries
Importantly, WEX clarifies that chargebacks following airline failures are different beasts altogether. These aren’t messy disputes over hotel minibar charges. They’re rapid, structured, and legally enforceable refund mechanisms that don’t require the failed airline’s cooperation—or any courtroom drama.
The proof is in the payout: from its first US$1 million recovery in 2012 to 14 separate recoveries exceeding US$500,000, WEX’s track record is as solid as titanium landing gear.
The Wake-Up Call for Travel Intermediaries
For travel intermediaries still paying via bank transfer, the message is simple: your business is flying without a parachute. With billions of dollars in B2B payments coursing through the travel sector each year, financial resilience is no longer optional—it’s essential.
And let’s not forget the downstream consequences: failed intermediaries mean stranded travellers, rattled investors, spooked acquirers, and potentially a domino effect that reverberates through the entire tourism ecosystem.
“This isn’t just about risk management,” says Kish. “It’s about building a stronger, more sustainable travel industry from the ground up.”
The Final Boarding Call
As new political cycles shift regulatory landscapes, and legacy payment systems groan under the weight of modern demands, there’s no room for complacency.
WEX’s message is clear for those still on the tarmac with legacy banking methods: upgrade or risk being left behind.
Explore more at wexinc.com/industries/travel.
