Airlines that go out of business-what happens to ticket holders?
The good news is that US airlines are required to honor tickets for an airline that ceases operating.
The bad news is that they can now charge ticket holders up to $50 each way for domestic flights or fees charged by a foreign government for overseas flights.
After 9/11, the Department of Transportation (DOT) allowed airlines to charge up tot $25 each way, but recently ruled they can increase it to $50 to lessen the financial impact on the already the ailing airline industry in the event of an airline demise.
The DOT also said that airlines must allow ticket holders to travel on a “space available” basis on the date of their original ticket, or as soon thereafter as space is available. And, the airline must provide substitute service even if its flights go to a nearby alternate airport, or if they offer only connecting service.
Charles Kao
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