Protecting Against Airline Shutdowns

[beccasmom]

Consumer Reports has a little section in the current issue about protecting onself from airlines going bankrupt. Basically, it says not to book too far ahead (on airlines that are financially unstable - they mention USAirways, Delta and United) because if an airline goes belly-up, the chargeback on your credit card will only go back to 60 days. This is great advice in theory, but waiting that long can often make it really hard to get seats! But for optimum protection, this is their advice. Or, of course, book on an airline that is more financially stable.

Also, they are advising that if you have frequent flyer miles you need to use (and are having issues redeeming them), use them on another carrier with whom your carrier may have an alliance (USAirways - StarAlliance, for example) or use them for other services, such as magazine subscriptions or charitable donations.

 

[CarolA]

Well, I think this is "scare mongering" and am a little surprised that Consumer Reports says this.

Of the three you mention USAir would strike me as the least stable, but they seem to be pulling through. USAir is in thier second bankruptcy filing in a very short period which makes it hard to pull out. United has been in bankruptcy for quite a while and seems to be flying just fine. Delta has yet to file for bankruptcy. Actually if you want "solvent" airlines who aren't losing money I think you are limited to SW, JetBlue and maybe CO.

Did Consumer Reports mention that (A) some credit card companies will refund you more then 60 days, call your CC for details and (B) that other airlines will allow you to fly standby should one of the majors go under. I have read and heard of CCs giving much longer refunds on airline tickets.

As for the using your miles on other airlines.... there has been a raging debate over on Flyertalk.com regarding USAir miles. The debate is "if you book using a USAir miles on airline X and USAir goes under does airline X have to honor the ticket" Last time I checked there was not a definitive response.

I have tickets for Delta that were bought months in advance. I am not the least bit worried. At this point I would even consider USAir tickets (which I wouldn't have considered prior to Christmas)

 

[beccasmom]

Here's the full text..........


"Protect yourself: When your airline flies
into financial trouble
vanishing act? Financial woes raise concerns that some airlines won't last.



When you plan your next flight, you need to consider schedules, fares, and now, the airline's balance sheet. With several carriers navigating financial turbulence, the one you plan to use may go the way of Eastern and Braniff before you're ready to take off.

Five airlines, including United and US Airways, are currently in bankruptcy. Delta Air Lines and nine smaller carriers lost $1.2 billion in the third quarter of 2004. Most of those carriers are expected to recover or reorganize their finances and keep flying.

Still, we think it's wise to hedge your bets when planning your next vacation. Here are the steps that we recommend:


don't plan too far ahead

If you book no more than two months ahead of time and pay with a credit card, you can secure important protections.

The credit card gives you Fair Credit Billing Act rights to a chargeback from the card issuer for services paid for but not delivered if the airline goes bust. But you must request the chargeback within 60 days of being billed. Airlines are presently required to honor tickets of an insolvent carrier that shuts down completely or sheds routes, if seats are available. But you must request a flight within 60 days of shutdown or route abandonment.


Use up your Dividend Miles

But be prepared for frustration if you want to cash them in for a plane ticket. “It has never been harder to redeem miles for award tickets,” says Tim Winship, editor of www.FrequentFlier.com, a Web site that provides information and advice about frequent flyer programs.

For example, US Airways Dividend Miles members had enough miles for some 6.3 million award tickets at the beginning of 2004 but claimed only 1.4 million seats.

Book a flight on a more financially secure airline affiliated with the one controlling your miles. Northwest, Delta, and Continental are part of the SkyTeam alliance. US Airways is part of the Star Alliance, which also includes Air Canada, Lufthansa, Singapore Airlines, and United.

Consider using miles for something besides air travel, such as magazine subscriptions or charitable donations".

 

[beccasmom]

Here's the full text..........http://www.consumerreports.org/main...ASSORTMENT<>ast_id=333149&bmUID=1113234412349


"Protect yourself: When your airline flies
into financial trouble
vanishing act? Financial woes raise concerns that some airlines won't last.



When you plan your next flight, you need to consider schedules, fares, and now, the airline's balance sheet. With several carriers navigating financial turbulence, the one you plan to use may go the way of Eastern and Braniff before you're ready to take off.

Five airlines, including United and US Airways, are currently in bankruptcy. Delta Air Lines and nine smaller carriers lost $1.2 billion in the third quarter of 2004. Most of those carriers are expected to recover or reorganize their finances and keep flying.

Still, we think it's wise to hedge your bets when planning your next vacation. Here are the steps that we recommend:


don't plan too far ahead

If you book no more than two months ahead of time and pay with a credit card, you can secure important protections.

The credit card gives you Fair Credit Billing Act rights to a chargeback from the card issuer for services paid for but not delivered if the airline goes bust. But you must request the chargeback within 60 days of being billed. Airlines are presently required to honor tickets of an insolvent carrier that shuts down completely or sheds routes, if seats are available. But you must request a flight within 60 days of shutdown or route abandonment.


Use up your Dividend Miles

But be prepared for frustration if you want to cash them in for a plane ticket. “It has never been harder to redeem miles for award tickets,” says Tim Winship, editor of www.FrequentFlier.com, a Web site that provides information and advice about frequent flyer programs.

For example, US Airways Dividend Miles members had enough miles for some 6.3 million award tickets at the beginning of 2004 but claimed only 1.4 million seats.

Book a flight on a more financially secure airline affiliated with the one controlling your miles. Northwest, Delta, and Continental are part of the SkyTeam alliance. US Airways is part of the Star Alliance, which also includes Air Canada, Lufthansa, Singapore Airlines, and United.

Consider using miles for something besides air travel, such as magazine subscriptions or charitable donations".

 

[beccasmom]

Excuse the double post!

 

[Caropooh]

Of the three you mention USAir would strike me as the least stable, but they seem to be pulling through. USAir is in thier second bankruptcy filing in a very short period which makes it hard to pull out. United has been in bankruptcy for quite a while and seems to be flying just fine. Delta has yet to file for bankruptcy. Actually if you want "solvent" airlines who aren't losing money I think you are limited to SW, JetBlue and maybe CO.

Well, as a United employee who is due to lose her job on June 4 I wouldn't say that United is doing fine. They are closing our whole reservations office(Seattle) in a cost savings measure.

 

[safetymom]

Sorry to hear you are losing your job.

 

[CarolA]

Well, as a United employee who is due to lose her job on June 4 I wouldn't say that United is doing fine. They are closing our whole reservations office(Seattle) in a cost savings measure.

I am sorry!

However, I can only speak from the travelers point of view and right now I would still buy tickets on them.

 

[mrslur]

We have tickets from US Airways for Nov/Dec and my travel agent insists that as long as they were charged to a credit card we can get a refund no matter when they go out of business. Hopefully, they won't! This was the major reason we used a travel agent this trip - because things are so iffy with so many airlines. I wanted someone to help out just in case.

 

[beccasmom]

I have always been told to make sure I charge airline tickets because of the added protection. There are only so many precautions a person can take if there are only a few (or maybe only one!) airline to your destination and you must travel. USAirways is a huge presence in Philadelphia and we in the area are very sensitive to issues surrounding their viability since many of us know someone who works for them. So, our ears are always "to the ground", so to speak. I've used them almost exclusively for years in spite of the questionable customer service on occasion. To think that Southwest or any other airline could pick up the slack overnight if USAirways were to decline is unreasonable.....that could take many months and perhaps more $$$ than they'd care to spend. So, we watch with some anxiety and take steps to protect ourselves financially, but we continue to hope for the best.