American Airlines bankruptcy: should you worry?
If you’re one of the 240,000 passengers flying American Airlines daily, will the bankruptcy filing ground you? And what about your Frequent Flyer miles?
The answer is “little noticeable impact” to the first question. And almost certainly no to the second about miles.
In fact, the good news for flyers may be that the filing will have a positive impact.
More questions and answers follow:
Q: Impact on flyers?
A: American continues to operate in business as usual. This follows a pattern of the past as bankrupt airlines continued to operate as they reorganized. Delta, United, Continental and US Airways have all gone through Chapter 11. Some flights will be cut.
Q: How many flights might be impacted?
A: Ten percent or even more, according to Bloomberg News, though the number could be higher. That only continues a current strategy at American and other airlines as they respond to higher jet fuel prices. Passengers whose flight is canceled or moved because of a schedule change will be rebooked, says Thomas W. Horton, who was named the new CEO of American's parent company, AMR Corp
Q: Are Frequent Flyer Miles endangered?
A: They are safe, says Gary Leff, co-founder of frequent flier site MilePoint. In the past, other bankrupt airlines have started new promotions to keep loyal travelers. There is no reason to think American won’t do the same, so it could work to benefit this lucrative segment of the airline market.
Q: Long-term, what’s the impact?
A: Passengers may find lower costs, just as they did when Delta and United worked their way out of Chapter 11.
Q: What’s behind the move (bankruptcy)?
A: The company could not afford to keep losing money. High oil prices also played a part. But American is also trying to cut back on labor costs, betting that the move will force concessions by unions.
Q: Could this lead to another merger?
A: The most likely candidate right now is US Air, which has so far not commented on the move.
By David Wilkening
David
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