Travelers holding tickets on an airline the goes belly-up have lost a legal safety net: A federal law that forced competing carriers to honor those tickets has expired. Although the measure could...
Travelers holding tickets on an airline the goes belly-up have lost a legal safety net: A federal law that forced competing carriers to honor those tickets has expired.
Although the measure could be resurrected by Congress, consumer advocates warn that the protections it provided are limited and passengers buffeted by the airline industry’s escalating financial turbulence should take their own steps to avoid being grounded.
The post-Sept. 11 airline bankruptcy legislation, which lapsed Nov. 19, states that if a U.S. airline ceases operation for financial reasons, ticketed passengers can fly standby on another U.S. carrier for a round-trip fee of no more than $50. The measure “is valuable because it gives people an incentive to keep traveling” at a time when ATA, Hawaiian Airlines, United and US Airways have already filed for Chapter 11 bankruptcy protection and others, including Delta and Independence Air, are in difficult financial straits, says the American Society of Travel Agents’ Paul Ruden.
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But because the law includes significant restrictions including traveling standby on the same route as the original ticket it gives passengers a “false sense of security,” San Francisco guidebook author Edward Hasbrouck says.
“Many city pairs are served only by a single airline or are overwhelmingly dominated by one airline,” Hasbrouck says. “If US Airways goes out of business, many passengers flying to, from or via Charlotte (its North Carolina hub) are likely to wait weeks for empty seats on other airlines.”
Another drawback: “It has never been clearly defined” whether the law would protect passengers flying on a frequent-flier award ticket, says Tim Winship, editor and publisher of Frequentflier.com.
Industry watchers say the law’s chances of being extended are slim, because its survival depends on passage of controversial intelligence-reform legislation that has been deadlocked in Congress.
Meanwhile, passengers can take their own precautions:
Buy tickets with a credit card.
Under federal fair credit laws you have some protection if you have paid for a service and don’t receive it: You can ask for a charge-back from the credit card issuer if your airline stops flying.
Don’t buy a ticket months and months in advance.
Under the Fair Credit Billing Act, you must dispute the charge, in writing, to arrive within 60 days after the bill containing the charge was mailed to you. Some credit-card companies give customers more time; check with your card issuer.
Investigate trip cancellation/interruption insurance,
but be aware that it may exclude airline bankruptcies. (For a comparison of policies, see www.insuremytrip.com.)
Get a paper ticket.
It can be easier to get another airline to accept than an electronic ticket.
Take a “use it or lose it” approach
to frequent-flier miles. If an airline goes under, another carrier may not assume its frequent-flier program.