When Delta goes Chpt. 11, what happens to frequent flyer miles?
 

American Express and Delta currently have a promotion that gives you bonus miles for miles transferred from AMX to Delta. It expires in about two weeks.

Therein lies the question ~ I think Delta will go Chpt. 11 or will be acquired by another airline (or both). What is the history of other airlines that have had frequent flyer programs and went through reorganization?

Trying to decide if I want to move some miles to get the bonus miles! I will not be using these miles to purchase tickets with Delta until Summer of '06. Would probably transfer 100,000 points (or miles) so would hate to waste. We already have used Delta miles for Switzerland vacation next summer.

Anyway, what do you think will happen to Delta and their frequent flyer program?

1. Just Chapter 11 = Nothing change.

2. Sold into pieces or merged with another airline = Miles likely will be transferred.

3. Shut down abruptly & filed for Chapter 7 liquidation = You lose everything.

2 & 3 won't happen in the near future, so you miles are safe. But it's never a good idea to move miles into any airline's FF program when not using it immediately. Maybe you can't find good flights on DL or its partners on the day you want to fly but USAirways do?

I suggest moving miles only AFTER you've secured award tickets and put them on hold.

It will become even more difficult to use your miles to your maximum benefit as the award seats - particularly those in business/first upgrades will become far fewer.
M

<<But it's never a good idea to move miles into any airline's FF program when not using it immediately. Maybe you can't find good flights on DL or its partners on the day you want to fly but USAirways do?

I suggest moving miles only AFTER you've secured award tickets and put them on hold.>>

True, true, true, true.

But just out of curiosity, how much is this bonus? I haven't received any e-mail about this.

I can't find this offer either on Delta.com or AE Membership Rewards. Maybe it's a targeted offer for certain members.

But from time to time I've seen offers to transfer to DL or CO programs - usually 20% to 25% bonus. Like 20K -> 25K.

I agree with mikemo. It is very difficult right now to use FF miles on Delta, I expect it will be almost non-existant if they go Chapter 11.

Hi.

I, too, received the promotional material on this offer and, yes, I believe it was targeted.

The bonus amount is 35% additional miles added to your account. This is substantial particularly if you have a lot of miles to transfer. I recently made the transfer because I believe the miles are relatively safe.

I agree with Pilchard. In a similar situation about a year ago, I tranfered some of my Amex miles to Continental, when there was a 25% bonus offer, knowing that we were planning a European trip in 2006. I did it in full confidence.

When United went Chapter 11 nothing happened to my miles but I feel they actually offered more bonus miles and promos.

As far as using them they may try to sell more revenue seats before giving free one. With United I found that I could usually use my miles on flights that were within a month of my travel dates.

Don't forget there is also mileage use with Deltas partners.

Anyeay, from what i can see DELTA isn't so gererous with free seats anyway!

I don't pretentd to predict what Delta will do, but I've used United and USAir FF miles for award tickets since they have been in Chapter 11 -- for travel on United, USAir, Lufthansa, and SAS. Really, no differences from pre-bankruptcy practice in any respect that I noticed.

delta would never bancrupt...

but then i said that about cggi, snnt, sinx, and xxxx, etc. in 2002...

personally. i'm converting my points @ +35%. i didn't pay for them anyhow.

In a bankruptcy, employees will lose some of their benefits, have their pay cut and pensions reduced. Stockholders will most likely lose their entire "investment". Bondholders will settle for something less than 100 cents on the dollar. US taxpayers will lose the money that's already been pumped into a losing airline.

So why should those with FF miles escape unscathed?

<So why should those with FF miles escape unscathed?>

Simple. Those holding lots of FF miles are also the airlines' best and loyal customers. Any significant and immediate depreciation of those miles mean you're kissing all of those customers goodbye.

Even when Pan Am closed its doors, Delta - who bought big chunks of Pan Am - honored those miles. AA swallowed all of TWA. Etc... UA/US/CO haven't done anything drastic to their FF programs while in their respective bankruptcies. All for the same reason.

Airlines can, and have, gradually cut down the number of FF award seats, and add fees and restriction to their use. That's how it's done.

If Delta is going to file for bankruptcy, it will probably file for before Oct. 17 when the new tougher bankruptcy laws go into effect. It's anyone's guess as to what will happen to FF miles but if you have them, you should probably try to use them sooner rather than later.

All I can say si that the entire copnversation is based on the OP's assertion that, "I think Delta will go Chpt. 11 or will be acquired by another airline (or both)."

Interesting thought for a purely, at this point, academic discussion.

I held on to my USAirways FF miles after they declared bankruptcy and have used them to get seats since.

I suggest you either try to use them up or wait and see. What other alternatives are there?

Interpid1 - The OP is thinking about moving AMEX Membership Rewards points <b>into</b> DL Skymiles. Not just about using them up.

My position is that one shouldn't worry about losing miles. The question is whether 35% bonus is enough incentive to move miles into <b>any</b> FF programs and not using them immediately.

I don't know the answer. To me, 20-25% is not. I've gotten many of such offers for moving AMEX points to DL or CO, and haven't taken up on any. Will 35% be enough? Only the OP can decide.

35% would be very tempting for me. On the other hand summer 2006 is a long way away (I'm assuming you won't be booking until summer 2006 for travel in summer 2007?) Luckily for me, I just emptied my MR account two months ago so I don't have this agonizing decision to make ;)

It is interesting that Delta stock ($1.20), not yet in bankruptcy, is selling for less than UAL ($1.39).

The legacy airlines suffer from bloated costs and over capacity. I'm sure that AA, NWA and the others would be pleased to have one less competitor. The Southwests and JetBlues would quickly fill the gap left by the disappearance of Delta without assuming the burden of FF miles.

Someday, we'll know.

Until the LCC's start flying around the world, they aren't going to take the place of the legacy carriers. Last I checked, Southwest only flew domestically and JetBlue only offers a few international routes (limited to Caribbean destinations).