The collapse of transatlantic low-fare airline Zoom raises questions about customer compensation and the financial viability of airlines in difficult times.

So do all passengers who have paid for tickets for future Zoom flights get their money back?
Possibly not all of them.

So who comes out best?
Those who have booked a Zoom flight as part of a package holiday are almost certain to be covered by the Civil Aviation Authority's (CAA) Air Travel Organisers' Licensing (Atol) system.

How does that work?
Companies in the Atol scheme lodge a financial guarantee bond with the CAA, which can be used to bring stranded clients home and compensate those who have future bookings if a tour operator ceases trading.

There is also a back-up fund called the Air Travel Trust that can be
dipped into by the CAA.

What about people who have paid for their Zoom tickets by credit or debit card?
If you buy your tickets with a credit card, and your transaction is more than £100, your money is protected under the terms of the Consumer Credit Act.

Many credit card companies will also refund money if the airline you booked with goes bankrupt, including the cost of unused return tickets. Your money may be protected even if the cost of your air travel was less than £100 and you paid by credit card, but you should claim within a reasonable time. This protection does not apply to debit cards such as Switch or Delta.

What about those who have paid cash for a flight-only deal with Zoom?
They won't get their money back.

Are other airlines or tour operators likely to get into financial difficulties?
Possibly. In recent months Eos and MAXjet - two business class-only carriers that operated transatlantic flights from Stansted airport - have bitten the dust, as has another luxury-seat airline, Silverjet, which flew out of Luton.

All these carriers were hit, like Zoom, by the economic downturn and the spiralling cost of aviation fuel.

So what can customers do?
Travel with well-established carriers. There are a number of airlines so big that even a major recession is unlikely to affect them to the extent of their going down the financial plughole.

And what can airlines and holiday companies do?
Get bigger. BA and its partner Iberia are attempting a link-up with giant US carrier American Airlines, while the big four UK tour operators - First Choice, Thomson, Thomas Cook and Airtours - have now reduced to two. Further mergers, take-overs and tie-ups are inevitable.