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For more on marking an answer as the "Best Answer", please visit our FAQ.it should say in their terms and conditions (which you will have to have read) prior to confirming your flight what their terms of cancellation are.
All travel companies will at the very least keep hold of your deposit but most scheduled or low cost airlines (as opposed to package holidays) will keep all 100% if you need to cancel. Its all completely legal and why most small print also says you should have travel insurance in place before finalising your booking. It sucks but it is all above board im afraid