The book on airline bankruptcy doesn't start or end with Chapter 11

[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

 



http://www.msnbc.msn.com/id/5774720/

=20

There are things you need to know when an airline files for
bankruptcy-and when one goes completely bust

=20

October issue, Budget Travel magazine - With major airlines making
headlines by losing billions of dollars and entering bankruptcy
protection, passengers are justified in being a little concerned about
their next flight.=20

Filing for bankruptcy doesn't mean a carrier is about to shut its doors.
Heck, an airline could survive the process without inconveniencing a
single passenger. But invoking Chapter 11 is not a good sign. In the
early 1990s, America West, Continental, Pan Am, Midway, and TWA all
filed for bankruptcy; America West and Continental are the only two
still around. And while TWA was sold with little disruption to
travelers, Midway went belly-up overnight, stranding customers with few
options. No one knows if a major carrier will cease operations anytime
soon, but at the very least a period of consolidation among airlines
seems imminent.=20

Be aware before you buy: Airlines enter Chapter 11 to reorganize
debt-and to give them leverage when it comes to agreements with
creditors and labor unions. It's a more dire situation when a carrier
goes into Chapter 7 bankruptcy, when planes and other assets are
liquidated and routes are often canceled. There are no telltale
indications that an airline will be OK, but getting concessions from
labor unions is generally considered a good sign (if not for the
workers). When unions refuse to budge, it often spells trouble.=20

Pay with a credit card: The Fair Credit Billing Act gives credit card
customers the right to dispute charges for services not received. People
who never get the chance to use tickets can at least get reimbursed by
the bank that issued their card.=20

Use miles sooner rather than later: Your frequent-flier miles might be
safe if your airline files for bankruptcy or is bought by a competitor.
Then again, they could become worthless overnight. Airlines can change,
or even eliminate, miles programs at a moment's notice, so use miles
whenever you have the chance. Another safeguard: If you're a frequent
flier with an airline in financial trouble, reserve through that airline
but fly on one of its stable code-share partners. For example, use
United points for a flight to Munich on Lufthansa.

Know the law: The Aviation & Transportation Security Act states that
passengers holding tickets on a defunct airline are entitled, within 60
days of cessation of services, to go standby on any U.S.-based airline
that flies that route, for a $25 fee. The law was passed as a temporary
measure in the aftermath of 9/11. Congress may extend its Nov. 19, 2004,
ending date, but it's important to read up and note if things change. =20

Have a worst-case-scenario plan: If you're at the airport when your
airline ceases operations, rather than simply waiting for a standby seat
on another carrier to open up, use your cell phone or laptop to research
flight schedules. It's a good idea to know which airlines fly to your
destination and whether alternative airports offer similar connections.
Airport flight guides are usually available in booklet form, or they can
be downloaded from the airport's website.

=20

[Index of Archives]         [NTSB]     [NASA KSC]     [Yosemite]     [Steve's Art]     [Deep Creek Hot Springs]     [NTSB]     [STB]     [Share Photos]     [Yosemite Campsites]