speedracer1407
Posts: 330
Joined: Fri Dec 24, 2004 4:19 pm

Mileage Programs After Bankruptcy

Wed Mar 23, 2005 4:04 pm

I did a quick search with these basic topics, and came up with nothing.

With the American Airline industry looking rather dismal, I'm wondering what will happen to the frequent flier miles earned on an airline that folds. As an occasional leisure traveler with no die-hard loyalties, I save my miles for years on various airlines in anticipation for that coveted free ticket somewhere, or (more often) a back-up for short-notice emergencies. Should UA, US, or AA fold sometime soon (tragically), I wonder what will happen to those miles I've accrued. This concern is surely a petty one compared to the prolific loss of jobs and such, but I'm sure those of you who've accrued tons of miles on these struggling airlines don't want them to simply vanish. Are there preemptive recourses for those who hold large stockpiles of valuable FF miles? Do these struggling airlines have contingency plans for their mileage holders should the worst happen? Thanks in advance for your replies.

O
Dassault Mercure: the plane that has Boeing and Airbus shaking in their boots.
 
wunala
Posts: 898
Joined: Tue Mar 22, 2005 7:17 am

RE: Mileage Programs After Bankruptcy

Wed Mar 23, 2005 5:35 pm

You loose the miles. I lost all my Ansett points. I had just flow LHR_SYD on NZ, the week before the collaspe specifically to get AN points, to get me a free round Australia J Class ticket. I completed all the forms etc to become a creditor, but nothing.
I did send the boarding cards to another *A carrier to have the points credited to that account.

It is bad that the airlines disappears and the job loss, and I would have sacrificed all my miles if the airline could have continued with job security, but several attempts failed. I dont think the press helped to much with their coverage.
 
speedracer1407
Posts: 330
Joined: Fri Dec 24, 2004 4:19 pm

RE: Mileage Programs After Bankruptcy

Wed Mar 23, 2005 5:55 pm

Wunala,

Well that just sucks, both for you and all other mileage holders, and for the employees of the company.

As a relative novice around here, I'm unfamiliar with Ansett and what you referr to as "*A" carrier. i'm assuming it's an affiliate or codeshare partner, which brings up another question: if lets say, NW goes bust, do NW skyteam partners accept a transfer of NW mileage to their FF programs? If so, is it any one of their partners?

O
Dassault Mercure: the plane that has Boeing and Airbus shaking in their boots.
 
wunala
Posts: 898
Joined: Tue Mar 22, 2005 7:17 am

RE: Mileage Programs After Bankruptcy

Wed Mar 23, 2005 6:05 pm

Speedracer,

*A is Star Alliance.

I sent the boarding cards from LHR-SYD to SQ and got points credited there. I lost all the other points I had. I flew back from london on the 7 Sept 01, and AN collasped on or around the 14th I think, so I sent a copy of my boarding cards to SQ. I think in my case, timeing was the key.

Basically, the value of the FFP's go onto the balance sheet as creditor of the company. I doubt you will see any company accepting a debt of another, especially, then in the case of points, they can be wiped out, the pax starts fro zeor again, and no liability is transfered to a partner airline.

This is why there are sales etc for us to use the points. It reduces the airlines future liabilities.

Hope this helps, but happy to clarify.

Cheers
 
EuroBonus
Posts: 91
Joined: Fri Nov 19, 2004 8:33 pm

RE: Mileage Programs After Bankruptcy

Thu Mar 24, 2005 2:20 am

I had some points at Sabena, when it collapsed my points were transferred to SN Brussels Privilege FF programme, and I got a new card, etc. But not all cases of bankruptcy remains the same, btw, did PanAm ever had FF programmes?
 
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EA CO AS
Posts: 13438
Joined: Wed Nov 14, 2001 8:54 am

RE: Mileage Programs After Bankruptcy

Thu Mar 24, 2005 2:25 am

When a carrier goes "Tango-Uniform," so do the miles - which technically belong to the airline, not the customer.

It's conceivable that in the event a carrier like US or UA were to fold that other airlines might be willing to open new accounts for you in their own programs, crediting you a portion of what you had with the failed carrier as a way to entice you as a potential new customer.

It's unlikely that any carrier will attempt to take over a failed carrier's mileage program entirely though, as the miles become a liability on their books and not an asset.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
gokmengs
Posts: 895
Joined: Wed Mar 09, 2005 2:48 am

RE: Mileage Programs After Bankruptcy

Thu Mar 24, 2005 2:35 am

Are you guys saying that if an airline goes bankrupt they cancel all your miles, I doubt that especially in the US. US airways went chapter 11 some time ago and they are still around I don't think they cancelled everyone's miles. If thats the case I'll start using my DL miles right away because it doesn't look that good for them, but hopefully they recover
Gercekleri Tarih Yazar Tarihide Galatasaray
 
ltbewr
Posts: 12392
Joined: Thu Jan 29, 2004 1:24 pm

RE: Mileage Programs After Bankruptcy

Thu Mar 24, 2005 2:37 am

When PanAm folded under bankruptcy, and DL bought out some of the remaining routes of them, all of my PanAm miles were transferred to a Delta account I already had. That may be an unusual situation, as most of the time when the airline is gone, the FF miles are gone too. With my Pan Am miles, along with bonus miles at the transfer, LGA-DCA shuttles and other DL flights, I got a free RT ride in Sept 1999 EWR-SLC on DL.
 
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EA CO AS
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RE: Mileage Programs After Bankruptcy

Thu Mar 24, 2005 2:49 am

Are you guys saying that if an airline goes bankrupt they cancel all your miles

Yes, that's EXACTLY what we're saying.

Some carriers might take pity on you and honor them in part, as a way of earning your business later - but no other airlines are obligated to honor them if they don't want to.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
simo82
Posts: 179
Joined: Tue Feb 01, 2005 7:31 pm

RE: Mileage Programs After Bankruptcy

Thu Mar 24, 2005 3:44 am

When Swissair went bankrupt they transferred my miles to sn brussels miles account and they send me a new membership card with the same number as the swissair one

CIAO
Simo
 
jakbar
Posts: 423
Joined: Fri Oct 10, 2003 3:47 am

RE: Mileage Programs After Bankruptcy

Thu Mar 24, 2005 3:53 am

I'm curious to see what others have to say about this related issue:

I recently redeemed a ton of US Airways ff miles for a r/t business class ticket to AKL/SYD from New York. I am flying US Airways domestically, but I am on other Star Alliance carriers internationally. As far as I know, my entire itinerary was booked and issued through US Airways. I am not taking the trip until the winter, and I was thinking about what the effect of US Airways going under would be (and I'm not looking to start a war here about whether US Airways will/should fold). Do you think my entire itinerary would be lost, or just the US Airways part, or perhaps none of it?
 
IAD777
Posts: 120
Joined: Thu Nov 27, 2003 7:15 am

RE: Mileage Programs After Bankruptcy

Thu Mar 24, 2005 4:17 am

Jakbar, you reminded me of a question I wanted to ask.

If USAirways collapse, in order to save my miles, I am going to purchase a star alliance business class ticket on a star airline using my usairways miles. for example iad-fra-iad (will probably be on lufthansa). I was planning on buying the ticket for as far in the future as possible, I gather its around 330 days from the time of booking.

Supose I purchase the ticket, my miles get transfered and sometime inbetween then and my flight, us airways goes bankrupt.

What I would want to do, is cancel my ticket and get my miles credited back to my account. However, at that point, US Airways won't exist, where do my miles go back to? That is, can my miles, originally from usair, but used to purchase a lufthansa ticket, be transfered to another of my star alliance accounts?

Sorry if this is confusing, but it's an odd scenario.

Any ideas?
History shall be kind to me; for I intend to write it -WSC
 
joeljack
Posts: 496
Joined: Fri Feb 25, 2005 12:38 pm

RE: Mileage Programs After Bankruptcy

Thu Mar 24, 2005 4:32 am

Great question Iad777. I would love to know too. I might do these same thing.
 
Planesmart
Posts: 1741
Joined: Sun Dec 05, 2004 3:18 am

RE: Mileage Programs After Bankruptcy

Thu Mar 24, 2005 4:54 am

Iad777

If you haven't got the ticket in your hand, have a confirmed booking, but the ticket hasn't been issued, you are an unsecured creditor.

Even with a ticket, there are some technicalities the carrying airline may be able to invoke to avoid honouring the ticket, but less likely.

Use them, transfer them or lose them.

Thats why in any major shake up in the industry, financiers see the ideal situation as being BK then merger (rather than just a merger / takeover), so financiers exposures crystalized and prioritised, unsecured loans & liabilities (inc FF schemes) effectively dropped, and clean sheet for labour agreements.

Of course BK is a trigger event for losing assets, like routes, gates and slots, so that is why industry re-organisation is taking time while the i's are dotted and t's crossed.
 
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EA CO AS
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RE: Mileage Programs After Bankruptcy

Thu Mar 24, 2005 5:33 am

It really all depends on whose ticket stock the ticket was issued, since that is which company is control of the "funds" (mileage or actual hard money) for those flights.

So assume you're flying on LH, but your ticket was issued on US Airways' 037 ticket stock. US controls the "money" backing up the ticket, and once LH picks up your flight coupon they would then bill US for the face value of it - or in your case, whatever value they've agreed to bill each other at for mileage travelers.

But if US goes under, the other carriers know that tickets held under 037 stock becomes worthless - because if they take it for carriage and then attempt to bill US, they won't get paid.

Now in the event you're traveling domestically, federal law enacted after 9/11 and recently extended allows you to travel STANDBY ONLY on healthy competing U.S. carriers who fly the same route for a fee not to exceed $25.00 each way per person. But again, it's standby only, and as far as I've seen it's for domestic travel only.

Since your ticket was using US miles, odds are your ticket number starts with 037 - meaning it's on their stock. Should they go under for any reason, you'll likely have no recourse whatsoever.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group

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