Bankrupt airlines
 

I listened to a story on NPR today concerning America West's financial difficulties. We have e-tickets to fly America West over Spring Break. What happens when an airline goes bankrupt? What happens to my tickets that I already purchased?

I read in the paper this morning that the Feds will likely prop up America West. I would definitely make sure I had a paper ticket even if I had to pay extra, just in case.

It's never a bad idea to buy trip insurance. But be sure that carrier bankruptcy is covered and be sure to read the fine print extra carefully. Sometimes, you need to buy your insurance at the time you buy your tickets to have certain things covered. But if you are truly worried, I would get the trip insurance.

I suspect fear of an Airline like America West going broke will create its own reality. People will not buy tickets on the aiirline expecting it will be out of business by the time their trip is going to happen.

There is a big difference betweeen an airline going bankrupt and an airline going out of business.<BR><BR>IF the airline files bankruptcy but continues to operate, your tickets should still have value on that airline. However, you may encounter a problem if they dramatically change flight schedules or eliminate destinations, like yours.<BR><BR>If an airline goes out of business, there is no legal obligation on the part of another airline to accept your ticket. They may agree to do so, but they are not obligated.<BR><BR>In either case, bankruptcy or closure, an airline ticket for future travel represents a liability for the company. You, as the ticketholder, essentially become an unsecured creditor of the airline. They have no legal obligation to settle your claim, immediately, if they cannot provide you with service.<BR><BR>The other reality of these situations is that often, people who paid on credit cards refuse to pay the bill. Credit card companies will often allow you to cancel the charge and they will aggregate the claim against an airline.<BR><BR>In ths spirit of full disclosure, I'm not an attorney but I have been involved with several bankruptcies professionally.

Have had experience with Midway, which is now back in limited business. But I had an e-ticket, paid for w/credit card, for a trip that disappeared when Midway tanked. Customer Service offered me the option of booking on another carrier or getting a refund. However, I was at the mercy of the two airlines re:my itinerary and they ended up offering me two connections in each directions, SO I asked just for a refund/credit on my credit card. It did not show up immediately, but I had called the Visa card people to alert them about Midway's demise and potential problems with collecting refunds. They were grateful, and here's what finally had to happen:<BR><BR>I had to fill out a form that's usually used for disputed charges and provide a copy of my e-ticket itinerary.<BR><BR>Just for good measure, I emailed the "refunds" address given on Midway's website.<BR><BR>I got the credit.<BR><BR>Shari: so what I suggest is that you be prepared to book on another airline and be aware that you pretty much have to take what they give you regarding times and routing; keep all records of ticketing, phone calls, etc.; and be ready to contact your credit card company for help if you need a refund.