Juldie

Is there anyway I can protect myself when buying a US AIR ticket for Thanksgiving? Want to purchase a ticket for my son to fly home from Pittsburgh from college and US AIR is the only non stop service. Given how busy of a travelling time it is I really can't see getting a flight with a stop or changeover on a less than 2 hour flight.

I am concerned about getting stuck with a US AIR ticket and the airline going under and having no recourse. Just wondered about any insurance on the flight. Any ideas?

lisaindc

I hope there is someone out there that can answer your question Juldie. I actually purchased both my Thanksgiving and Xmas tickets on US Air in March or April and am now wondering if I am going to be out the $300+ if they end up liquidating.

Ryan

I can't imagine that someone will provide you with travel insurance against a USAir ticket.

You're best insurance to be brutally honest is book him on another carrier.

As of right now, under legislation passed in the fall of 2001, airlines are required to accept the tickets of a carrier that stops flying. The only additional cost is a $25 administrative fee. That legislation expired in March 2003, but was extended. That extension expires this fall. The airlines are fighting another extension so not sure where it stands.

If USAir stops flying, here's your options (1) hope that the legislation is still in effect and that he can get a seat on another carrier. As you said, no one else flies direct so he'll need to make a connection (2) if the legislation isn't extended then you'll need to scramble and come up with a plan B.

Your risk right now is whether or not US Air can make it through at least year end with somewhere between $700 and $800 million of cash. Based on everything I've read, industry experts are saying it's 50:50.

Honestly, if it were me, I'd go for certainty and book another carrier.

AAFrequentFlyer

I assume you will be using a CC for payment? If that's the case, there is your best protection. The CC will refund your money if you did not receive services/goods you paid for. They have to under the Federal Credit laws. The problem with that is that although you will get your money back, your son is not coming to visit or you would need to find a reasonable fare on other airlines at the last minute, which could become a VERY expensive option.

The whole idea that the other airlines HAVE to accept you is true, but they do not have to bring in another plane to pick up the stranded passengers. It's on a available basis only after their own reservations are all taken care of first. With Thanksgiving being the busiest weekend to fly, I would not plan on that as a back-up, only because it may take your son days to travel the short distances, as he would be on standby basis ONLY with the other airlines.

So, in conclusion, I would suggest looking at another airline at this point. It looks bad for USAir at this moment. There is a very informative article in today's New York Times. Many of the airline experts quoted in the article are doubtful that USAir will be able to survive and if they do, it will be a great deal smaller, with many routes cut and specifically routes to small towns. and most international flights.

caribtraveler

I agree with what above posters say. And I'd also buy with another airline especially since the trip is on a holiday.
To be a bit more specific only visa and mastercard fall under the law the previous poster mentions (american express and debit cards -even with visa logos- don't).
Good luck.

Ryan

Actually AAFrequent Flier, I do not believe that Credit Card companies are required to refund your money in the case of a bankruptcy filing. If you purchased a ticket PRIOR to the bankruptcy filing, then you become subject to bankruptcy laws which supersede consumer protection laws. Credit card companies will often, as a customer accomodation work with customers and they'll aggregate the claims but they are not obligated to if you purchased a ticket, THEN the airline files. You, in reality, become an unsecured creditor like everyone else who provided them with services. Most of the time, your claim goes away because they simply provide the service while in bankruptcy.

In the case of the IP, if she purchases the ticket today, then she is techically a "post-petition" creditor and then the CC laws might apply - I repeat might apply.

But, given the fact that getting a backup flight becomes increasingly more difficult and more expensive the closer it gets to the holidays, I think her best bet is avoid the situation outright.

(BTW, I spent a great deal of time researching this very issue a few years ago. A furniture company I was financing had numerous customer deposits for furniture. Our lawyers pretty much insured us that anyone who put a deposit down before the filing, even those with a credit card, would lose their deposit if you ever liquidated the company. Effectively, their cash for furniture deposits becomes your cash with no obligation to provide the furniture if you file a Chapter 7 or 11.)

caribtraveler

Ryan: I believe the law AA is talking about is different than what you're talking about. Buying things like furniture, cars even with a credit card does not fall under this law.
See the details of the law which specifically talks about furniture buying. Feel free to tell me I'm reading it wrong as laws can be a bit complicated to understand (at least for me!).
http://www.ftc.gov/bcp/conline/pubs/credit/fcb.htm
When the cruise line filed for bankruptcy in our case (and it happened after we had purchased the package), we were told that if we chose to get our money back from the credit card company we couldn't do the court thing and vice versa.
But you made me think of something else. The original poster would be buying the ticket AFTER the airline has filed for bankruptcy. I wonder if the CC law would apply if the airline shuts down operations before Thanksgiving...hmmm...Anyone knows?

Ryan

I realize I left out one key fact. AA was correct but ONLY if you request in writing the credit card company within 60 days of the original bill.

I went back and looked at some notes I had on this subject and saw that under the Fair Credit Billing Act you can make a claim for non-service, but only within 60 days of the original bill from your credit card company.

So, in the case of the OP, if she does buy the ticket, and they stop flying, she can get a refund within that 60 day period if she uses a credit card.

The issue then becomes availability of other flights and cost if the flights are cancelled.

Ryan

Carib, I think the 60 days is what I had forgetten about. It would seem very unusual for Amex and Visa to be exempt from a law that requires Mastercard to do the refund. I'm not sure why the law would provide preference to one credit card company and not another.

It would seem unusual that Amex and Visa would be able in their cardholder agreement to put in language that exempts them from FTC regulations.

rkkwan

In one of the USAirways-related article on today's Wall Street Journal (Page B2, I believe), the issue of credit card is mentioned. Most credit card companies will refund you if you don't receive your goods or service, but this has to be done within 60 days of purchase. Now, Thanksgiving is over 60 days from now, and if you buy your tickets now and they're flying then, then the credit card company may not refund you as easily.

But since these cases are so rare, each situation may be a little different. I believe most people who paid for Renaissance cruises by credit card did get their money back eventually even though most paid over 60 days prior to departure.

rkkwan

Sorry, I mean if USAirways is NOT flying then.

caribtraveler

Hmmm...Are you 100% certain? Isn't the 60-day limit for errors on your CC bill? We purchased our flight/cruise package a good 6 months before the scheduled trip. The cruise line filed for bankruptcy 2 days before the trip. So we had been billed 5-6 months before that. The CC reimbursed us without a problem.
And you misread me, I didn't say Visa was exempt. It's not..I said debit cards were. But some debit cards have CC logos on them. Those are exempt because they're not really CC. I didn't one the original poster to think she could use one of those.

MikeT

I also believe it is unlikely that USAirways will close down by Thanksgiving. If the airline shuts down, it will probably be at least six months. While I wouldn't book anything after Jan. 1, you are probably okay with Thanksgiving and Christmas.

Ryan

Here's the language from the link you posted.

"To take advantage of the law's consumer protections, you must:

write to the creditor at the address given for "billing inquiries," not the address for sending your payments, and include your name, address, account number and a description of the billing error.

send your letter so that it reaches the creditor within 60 days after the first bill containing the error was mailed to you."

As I said, credit card companies will sometimes accomodate customers beyond the legal requirement. In the case of your cruise, they clearly did.

In terms of the debit cards, sorry missed that. BTW, MasterCard does issue debit cards, I've got one.

caribtraveler

Ryan: Yes I read what the law said, but I don't think it's specific though. I think there's a huge difference between a billing error and a bankruptcy filing. I just find it hard to believe that my CC would give me back all that money if they didn't have it, without fighting it. Know what I mean? Or am I just being cynical?
And I missed your earlier American Express comment. I read about their exemption in a travel article about how to protect yourself from bankruptcies. I haven't seen that anywhere else so hopefully the writer didn't put out wrong info.

Ryan

Carib,
I would suggest that your credit card company has numerous financial options available to it that you do not which makes the decision for them to waive the 60 day notice less of a cost than you might think.

For them eliminating the charge for you, beyond the 60 day date is part of the cost of doing business. But, it's a cost that can in part be recouped through a variety of means which in reality means they are probably out very little, if any money from your original charge.

The first is what is called "right of setoff." Banks that have corporate deposits will often get an agreement stating that balances in corporate accounts, can be used to satisfy obligations to the financial institution. Credit card companies will also do something similar as they are usually paying to a service provider the proceeds of newly issued charges within 2 to 3 business days. So, if I owe you money on new charges, I may hold back that money to satisfy the risk I have from older charges.

Credit card companies also carry insurance against these situations not to mention the fact trade claims, like USAir owing Chase Visa $5million, can be sold and traded. AMEX might turnaround and aggregate their claim and sell it to an investor who buys securities of distressed companies with some expectation of settlement.

But, the reality is that your bank probably doesn't own your credit card balance anyway. Almost all revolving credit card balances are sold as securities to institutional investors. Every single one of those securitization transactions factors in expected levels of loss - ie. charges that can't be collected.

Your credit card company, might simply view that $5,000 charge as a $1,500 charge that goes against pools of receivables that anticipate exactly those kind of situations.

caribtraveler

Hmmm..Can you explain it all again in English?
I'm kidding. I appreciate you trying to explain it to me.

TopMan

Personally, I think all you, and the orginal poster (what HAPPENED to that person by the way??????) need to know is: the best "protection" is to use another airline....and I am so sorry that the college student might have to "endure" a change of planes as opposed to flying non-stop.

Brian_in_Charlotte

I read recently in our local paper (who has been following USAir very closely) that the credit card companies specifically exempt airline ticket purchases from the 60-day time limit.

The bottom line is, if you purchase tickets with a credit card, you will not lose money.

pb_and_j

They will not immediately shut down. THey went into bankrupcy in 2002 and continued to fly throughout that period.
With Thanksgiving and Chirstmas being the busiest flight periods of the year, they will definitely continue their flights at least through then.
Whether or not they will make it through permananently is debatable.