For quite some time, I have been one of the few voices in this forum that warned against one believing that by booking an award on a Star Alliance Partner, one could definitely ensure against loss of one's Dividend Miles for such a trip and that even in the event of a US Airways liquidation, your award tickets would be safe.

Although this might have been posted elsewhere, Randy has now modified his previous pronouncement in USA Today that by booking an award trip on United, you were certain to have that airline honor your award tickets in the event of a US Air liquidation.

Randy now gives the following prudent advice:

"Buy" cheap insurance --


Consider redeeming your miles for a "possible" future trip on a US Airways partner. Look at Bahamasair in the Caribbean, United Airlines to many domestic and international destinations, Air Canada for Star Alliance destinations in North America and other Star Alliance carriers, such as SAS, Lufthansa, etc, for international destinations. While this method is not fail proof, it does allow you a bit of breathing room because, if US Airways were to liquidate, your award tickets on these other carriers would likely be honored. If after the start of the New Year you're feeling good about US Airways, you can re-deposit your award into your Dividend Miles account. Sure, it creates an accounting nightmare for US Airways and its partners, but US Airways got itself into this position and certainly understands that members have a right to take advantage of this type of partnership offer. There are fees associated with this strategy, but that's life.



http://www.insideflyer.com/articles/article.php?key=1936
(Emphasis Added)

Therefore, although there may be many reasons for a Star Alliance partner to honor the award tickets, it is no sure thing.

I am glad that Randy has amended his previous advice as I believe it to be both correct and prudent for him to do so. ^

IMHO this is bad advice.

Not only does it create an "accounting nightmare" for US and partners (although I doubt that it really does since they don't do anything with this stuff until after the flight...) but it will cost anyone except a CP real out of pocket dollars in redeposit fees.

Don't book trips for "insurance" purposes. Book trips that you really intend to take.

They're only miles. Redeposit fees, on the other hand, are real money that you can actually use to buy stuff.

For quite some time, I have been one of the few voices in this forum that warned against one believing that by booking an award on a Star Alliance Partner, one could definitely ensure against loss of one's Dividend Miles for such a trip and that even in the event of a US Airways liquidation, your award tickets would be safe.

Although this might have been posted elsewhere, Randy has now modified his previous pronouncement in USA Today that by booking an award trip on United, you were certain to have that airline honor your award tickets in the event of a US Air liquidation.

Randy now gives the following prudent advice:





http://www.insideflyer.com/articles/article.php?key=1936
(Emphasis Added)

Therefore, although there may be many reasons for a Star Alliance partner to honor the award tickets, it is no sure thing.

I am glad that Randy has amended his previous advice as I believe it to be both correct and prudent for him to do so. ^

I see that the Senate is ready to pass the extension of the bill to require airlines to accomodate pax froman airline that has shutdown on a stand by basis.

I also read that the credit card companies are lobbying heavily to get this extended so they don't have to refund the price of tickets purchased with credit card on a airline that has shut down.

..

Don't book trips for "insurance" purposes. Book trips that you really intend to take.


Funny you should mention that. I just "burned" 120,000 miles (most of my remaining dividend miles) on a First Class reward ticket to Japan (on ANA out of IAD -- couldn't get the JFK 747 with its sleeper pod, sadly), for a trip in September of 2005. I was planning on this trip (http://www.coasterclub.org/gallery/thumbnails.php?album=10) anyway. so I figured what the hell.

I realize it's a long ways away, but hey, that'll test the whole "the partner will probably honor the ticket..." theory :)

I see that the Senate is ready to pass the extension of the bill to require airlines to accomodate pax froman airline that has shutdown on a stand by basis.

I also read that the credit card companies are lobbying heavily to get this extended so they don't have to refund the price of tickets purchased with credit card on a airline that has shut down.

..


As I understand it, the previous bill was silent as to whether award tix were covered under its provisions, and the FAA declined to make any statement either way whether such a ticket was circumscribed by its rules.

The credit card companies will have to refund such tix prices, even if the bill is passed, assuming someone is not able to obtain the standby seating that the bill contemplates.

Whether or not Randy's advice is correct or not, I was merely commenting on the fact that he has now amended his prior statement that it was a lock for someone to trade in their Dividend Miles for a tix on United. I never felt so confident that one would definitely be permitted to fly United in the event of a US Air liquidation -- if US does liquidate United might honor the tix, but I thought it highly speculative that they were assured of honoring such tix.

As I understand it, the previous bill was silent as to whether award tix were covered under its provisions, and the FAA declined to make any statement either way whether such a ticket was circumscribed by its rules.

The credit card companies will have to refund such tix prices, even if the bill is passed, assuming someone is not able to obtain the standby seating that the bill contemplates.

Whether or not Randy's advice is correct or not, I was merely commenting on the fact that he has now amended his prior statement that it was a lock for someone to trade in their Dividend Miles for a tix on United. I never felt so confident that one would definitely be permitted to fly United in the event of a US Air liquidation -- if US does liquidate United might honor the tix, but I thought it highly speculative that they were assured of honoring such tix.

I would agree. This action is not aligned with anything that is happening with US, it just so happens the existing law expires this month.

The article made no mention either way on award tix. It was mainly indicating that the credit card companies wanted the law extended to minimize the number of refunds that they would have to give in case an airline went under--

That part I am sure is related to US. I doubt Visa, Mastercard, et al were lobbying heavily when the law was first passed. They just see it in their best interest this time..

..

I would agree. This action is not aligned with anything that is happening with US, it just so happens the existing law expires this month.

The article made no mention either way on award tix. It was mainly indicating that the credit card companies wanted the law extended to minimize the number of refunds that they would have to give in case an airline went under--

That part I am sure is related to US. I doubt Visa, Mastercard, et al were lobbying heavily when the law was first passed. They just see it in their best interest this time..

..

Ain't that the truth, now that the credit card companies see that added to USAir are both United and ATA which are now in Chapter 11, as well, and no pun intended, Delta, waiting in the wings to file, probably some time next week!!

With respect to award tix, I actually was referring to an article that I had found some time ago when I first debated the issue as to whether one was better off booking a reward tix on US Air metal or United metal. Moot point, perhaps, but in the event of a US Air liquidation, at least one has the hope that United would still honor the tix, with a US Air liquidation, that hope is eviscerated.

In any event, it looks better for US Air now, than at any time in the recent past, even pre-bankruptcy, as some of the cuts needed for them to transform themselves into a low cost carrier have been sanctioned by both the Court as well as some of their workforce. It now remains to be seen whether such a restructuring can be made to work, but if the results are encouraging, that would go along way to rebuilding confidence between management and their workforce.