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The Honolulu Advertiser
Posted on: Tuesday, September 14, 2004

Airline woes keep fliers on the edge of their mileage seats

By Abe Aamidor
Indianapolis Star

The biggest fear passengers have when an airline declares bankruptcy is that they won't be able to use their tickets or frequent-flier miles.

"I still have airline tickets from Eastern Airlines for my son, and I never got my money back. That goes back many years," said Alex Kutin, a travel agency owner in Indianapolis.

Eastern Airlines ceased operations in 1991, after earlier declaring bankruptcy.

Savvy travelers have reason to be nervous about their airline tickets these days: US Airways on Sunday filed its second bankruptcy in two years. Delta Airlines recently announced plans to lay off 7,000 employees and scale back its Dallas-Fort Worth hub in a move some say could be a precursor to Chapter 11.

Travel industry experts say passengers can do several things to help ensure they reach their destination.

• Don't panic. Current airline bankruptcy filings so far have all been under Chapter 11, financial reorganizations that mostly affect airline vendors and large creditors, but keep planes flying. US Airways said it plans to keep all flights going.

• Charge it. The Fair Credit Reporting Act allows you to dispute charges made to your credit card for services you paid for that never were rendered.

• Use your frequent-flier miles. If you're really worried that your favorite carrier may not be around for long, pay for your next flight with your accumulated frequent-flier miles or awards.

Even if your airline shuts down for good, historical precedents suggest that other airlines will honor your reserved ticket on a "standby space available" basis, said Suzanne DeCellis, vice president for travel at AAA Hoosier Motor Club.

"There will be interruptions," said DeCellis, such as probably having to take an indirect route for a former nonstop flight. "But they will get to their destination."

Some people advocate trip-interruption insurance, but there's a loophole as wide as a Boeing 777 in most policies. Such plans typically don't cover flight cancellations due to a bankruptcy unless the tickets were purchased far in advance, long before an imminent bankruptcy became common knowledge.

Hoarding frequent-flier miles or other travel awards probably is a bad idea when dealing with financially troubled airlines. Randy Petersen, editor of Inside Flyer magazine, says "100 percent" of such miles and awards have been lost in every complete airline shutdown since the programs were introduced.