If airline files for Ch. 11, are FreqFlyer miles automatically canceled?
Aug 13th, 2002, 07:24 AM
#1
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If airline files for Ch. 11, are FreqFlyer miles automatically canceled?
With USAir already in Chap. 11 and UAL threatening, I'm wondering if that automatically means FF miles are instantly worthless. Any point in trying to convert FF miles to certificates now or applying them to a trip yet-to-be-planned (apply for a date then hope we can change date if they're still in the air)?
Any FF award experts out there?
Any FF award experts out there?
Aug 13th, 2002, 08:50 AM
#3
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You could insure your miles with
www.awardguard.com
www.awardguard.com
Aug 13th, 2002, 09:36 AM
#4
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Full-page ad in today's Boston Globe (probably other papers as well) stating that FF miles/awards, etc. are all operating as usual - both redemption and earning. No info on whether or not you are better with miles or tickets, but my guess is that if they stop honoring one, they will stop honoring the other so it won't matter. The fine print on all FF programs says they can change the rules whenever they want. Still, they have nothing to gain by annoying their more frequent travelers.
Aug 13th, 2002, 10:37 AM
#5
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USAir's website is full of assurances that people w/miles will keep them and still get awards. I have most of my miles on UA and AA, so this particular situation doesn't affect me YET.
But as I understand it, these FF accounts qualify as "liabilities" and passengers with mileage are, in effect, creditors just like anyone else to whom the airline "owes" something. I have been told that these mileage accounts can, therefore, be treated like any account payable -- and with less weight than others if the judge so orders during reorganization. A judge could say "10 cents on the dollar" or "cancel mileage accounts" or "1 mile for ten" or whatever -- or the airline could tell the judge part of their plan to get back on a cash-footing is to eliminate these accounts altogether.
As to alienating customers -- has to be a fine balance, and I wouldn't be surprised to see the redemption requirements changed drastically, favoring only the VERY frequent flyers in premium status, if that. After all, these accounts amount to free travel, empty seats, etc.
Seems to me they'd be smart to give people a deadline after which they couldn't use the miles anymore, plus added restrictions re:how far ahead they can book award seats (so as not to fill potentially revenue-earning spaces). Screams went up about this in the past, but now there are millions of unclaimed miles just sitting in people's un-expire-able accounts.
But, as Gail said, the fine print lets them do anything they want.
But as I understand it, these FF accounts qualify as "liabilities" and passengers with mileage are, in effect, creditors just like anyone else to whom the airline "owes" something. I have been told that these mileage accounts can, therefore, be treated like any account payable -- and with less weight than others if the judge so orders during reorganization. A judge could say "10 cents on the dollar" or "cancel mileage accounts" or "1 mile for ten" or whatever -- or the airline could tell the judge part of their plan to get back on a cash-footing is to eliminate these accounts altogether.
As to alienating customers -- has to be a fine balance, and I wouldn't be surprised to see the redemption requirements changed drastically, favoring only the VERY frequent flyers in premium status, if that. After all, these accounts amount to free travel, empty seats, etc.
Seems to me they'd be smart to give people a deadline after which they couldn't use the miles anymore, plus added restrictions re:how far ahead they can book award seats (so as not to fill potentially revenue-earning spaces). Screams went up about this in the past, but now there are millions of unclaimed miles just sitting in people's un-expire-able accounts.
But, as Gail said, the fine print lets them do anything they want.
Aug 13th, 2002, 11:13 AM
#7
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You welcome MLK.
The company is reputable as far as I know. In the case of another post in regards to UA miles I would hold off on buying coverage, unless they go into chapter 11 as well. In the case of USAir, I would seriously think about it especially if you have 100's of thousands of miles in your account. If you just have enough for a coach ticket or 2, then by all means get the award cert. or tickets now. MLK made a good point. USAir could assure you all they want, but if for some reason a judge looks it from a different point of view(per MLK), you might be out of luck.
That said, I do believe that USAir will be allowed to survive. But stranger things have happened.
The company is reputable as far as I know. In the case of another post in regards to UA miles I would hold off on buying coverage, unless they go into chapter 11 as well. In the case of USAir, I would seriously think about it especially if you have 100's of thousands of miles in your account. If you just have enough for a coach ticket or 2, then by all means get the award cert. or tickets now. MLK made a good point. USAir could assure you all they want, but if for some reason a judge looks it from a different point of view(per MLK), you might be out of luck.
That said, I do believe that USAir will be allowed to survive. But stranger things have happened.
