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Flying On Bankrupt Airlines
In these tough economic times, struggling airlines may declare bankruptcy while continuing flight operations. TravelSense offers these tips to consumers holding tickets on any airline that has declared Chapter 11 bankruptcy:
- Use a credit card. When selecting an airline rumored to be in financial trouble, you should pay by credit card. Under the Fair Credit Billing Act, credit card customers have the right to refuse paying for charges for services not rendered. Details of the Fair Credit Billing Act can be found at the Federal Trade Commission's Web site.
- Consider insurance. Some travel insurance policies may include supplier default protection. However, before purchasing insurance you should check with an ASTA member travel agent to determine what policy best meets your needs.
- Remember Section 145. If you have already purchased a ticket on an airline that ceases operations, you may be entitled to stand-by travel on other airlines. Section 145 of the Aviation and Transportation Security Act provides that airline passengers holding tickets (paper or electronic) from a bankrupt carrier for a particular route are entitled, at minimum, to transportation on a space-available basis on ANY airline currently serving that route provided the passenger makes alternate arrangements within 60 days after an airline has suspended operations. Additionally, the maximum fee that an airline can charge for providing standby transportation should not exceed $50 each way. Unless extended, Section 145 is valid through November 30, 2006.
- File a claim. If all else fails and you are unable to take advantage of the Fair Credit Billing Act or Section 145, you should file a claim with the bankruptcy court. The bankruptcy court usually provides filing instructions, including claim forms, within months after a bankruptcy is filed.
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