How To Protect Yourself From The Effects Of Airline Bankruptcy

Travel Articles | March 3, 2008

The travel industry has been in major upheavel since the mid ninties and has changed dramatically. You, as a ticket-paying passenger need to be informed in order to make the best travel decisions for yourself and your family. What options do you have if you've purchased tickets on an airline that goes belly-up?

One airline's marketing slogan is, "Fly the friendly skies...", well, those skies are not very friendly for you when the airlines are in financial trouble.

The airline industry has struggled for more than a decade, even in the favorable economics of the 90's. All the major US carriers, with the exception of Southwest Airlines, have been in bankruptcy or are in the state of chapter 11 now.

Hopefully there will not be any more airline bankruptcies and I know that's wishful thinking, but it has to be recognized that it could possibly occur. Following are guidelines you should know and how an airline bankruptcy could effect you.

If an airline declares bankruptcy, it is not obligated to carry you or to refund tickets issued before the bankruptcy.

If you purchased your airline ticket directly from the airline, the airline is not obligated to refund the ticket.

If you purchased your airline ticket from an internet web site not owned by an airline, such as expedia, travelocity, etc., that web site is acting as an agent for the airline and is not allowed to refund your airline ticket.

If you purchased a ticket through a tavel agency, the agency is not allowed to refund the ticket of the bankrupt airline.

Money given to a travel agency for an airline ticket, whether it be cash, check or credit card, immediately becomes the property of the airline.

Travel agencies are required by law to comply with an airline's orders, rules and directives.

If an airline declares bankruptcy, it might continue service, limit service or stop service completely.

Other airlines might accept passengers under limited circumstances or may refuse to accept any passengers from the defaulted airline.

The United States government has given airlines 'preemption', or immunity, from consumer protection laws. Your rights as a US citizen do not apply to airline bankruptcy.

How You Can Protect Yourself From Airline Bankruptcy

This may sound trite and over-simplified, but the best bet is to purchase and travel on financially stable airlines. Be informed, search for information concerning the financial condition of an airline you're considering to purchase from.

Regardless of what airline you choose to fly, travel insurance is your best and only protection in case an airline declares bankruptcy or about any other unforeseen circumstance. Before purchasing travel insurance from a provider, and there are many, be certain the policy will cover an airline bankruptcy.

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ABOUT THE AUTHOR

David Tinney is an expert in educating the public in the art of budget travel. His travel agency, started in 1991, specializes in family vactions and wholesale airline fares, also known as consolidator airfares. In 2004, David published "Why Not Fly Free", an eBook revealing his personal strategy how to fly practically free.