US Airways Dividend Miles (Pre-FlightFund Merger) - Charlotte Observer Article on Survivability of US DM Miles

Interesting:

http://www.charlotte.com/mld/charlotte/living/travel/9470675.htm

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Comments in the article attributed to Randy have raised new questions in my mind about validity of US ticketed rez on partner airlines after US folds.

"Schedule a trip on US Airways or miles partner United Airlines. For travel within the next month or two, you're probably OK to choose US Airways; further out, opt for United, which would honor a ticket once it has been issued, Peterson said. "

"United refused to comment on whether it would redeem Dividend Miles if US Airways ceased operating. Peterson said it probably wouldn't."

"Be sure to monitor US Airways news and keep in mind you probably won't have this option if US Airways goes under. Star Alliance members are not obliged to honor frequent-flier miles earned on an airline that folds, Peterson said."

"When Australia's Ansett Airlines shut down in 2001, its nearly 3 million members lost benefits they could have redeemed via Star Alliance, he said. But an airline will honor a ticket paid for with US Airways miles, even if US Airways shuts down."

These comments are distinguishing between unredeemed miles and tickets issued based on miles but not flown. If I'm reading this right, the latter tickets will be honored even if US folds. However, I've read around here that the partner airline is not required to honor US tickets in the event of final bankruptcy because the ticket is not "paid for" until after the trip.

Has the author of the article misquoted Randy?

Perhaps someone with pending *A award travel on another carrier has asked the partner what will happen with their ticket if US disappears.

Has the author of the article misquoted Randy?

I don't think so. He said substantially the same thing in USA Today (http://www.usatoday.com/travel/flights/miles/2004-07-12-askrandy_x.htm). I asked for a clarification in the Only Randy (http://www.flyertalk.com/forum/showthread.php?t=337290) forum, but sadly it was not answered. I'm going to try to bump it up and see if it does get a reply now.

The moral of the all these stories is use your miles till you get to an amount you'd feel "comfortable" losing if US goes under and nobody honors your miles.

From what I've read, partner carriers are not obliged to honor the tickets, but always do to engender goodwill and not piss off potential customers.

Perhaps someone with pending *A award travel on another carrier has asked the partner what will happen with their ticket if US disappears.

I don't think you'll get any official response from United because they don't want to appear like vultures circling around a possible corpse.

IMHO, it doesn't matter if US is about to liquidate, or has $10B in the bank - FFPs are NOT banks, and excessive mileage balances should not be maintained (unless for a specific purpose, like redeeming multiple RTWs for a group, etc.) as the points do not earn interest and are subject to "devaluation" or even complete loss at ANY time.

Perhaps someone with pending *A award travel on another carrier has asked the partner what will happen with their ticket if US disappears.
I have two F tix booked on LH with DM miles. We're going in December. Not too helpful at this point, I know. I suppose I could call LH but I'm not sure whether the res agents know any more about it than we do.

OTOH, I remember reading (in one of the many articles about the probable doom of US) that, even if they re-enter Ch.11 (which probably wouldn't happen until at least the end of September), it might be 180 days before they succumb, if they do. So I still might be safe.

Again, I'm waiting and seeing.

I don't think so. He said substantially the same thing in USA Today (http://www.usatoday.com/travel/flights/miles/2004-07-12-askrandy_x.htm). I asked for a clarification in the Only Randy (http://www.flyertalk.com/forum/showthread.php?t=337290) forum, but sadly it was not answered. I'm going to try to bump it up and see if it does get a reply now.

I provided what I think is the distinction between the 2 situations in the RP thread. tls

I provided what I think is the distinction between the 2 situations in the RP thread. tls


As I was advised by knowledgeable US Air individuals, the United tix that are issued with US Air Div Miles actually have a US Air stock # on it, not a United stock number. Therefore, one may clearly argue that they are "US Air Tix" and not United tix.

Moreover, as I have said before, although this tix appears in the United database and is also given its own United Record Locator, I have discovered that if one wants to change the date or time of the award tix, you must go back thru US Air, and not United, to have the seats reassigned. That tends to back up a claim that they are not United Air tix, but in actuality US Air tix!!


None of us really know what is the actual agreement between US Air and United re seats on code-share planes, etc. Technically, with US Air being given a share of award tix on each ane every United flight, those award tix can be viewed as tix on a code-share.

I belive that the SOP is for the carrier to be reimbursed after the flight has been flown, and therefore, if US Air is no longer in business, or if United has yet to be paid for the tix by US Air, or if United is to become an even larger creditor in any US Air bankruptcy, United may very well deem such US Air award tix as tix that it may never get repaid, and as they are operating under bankruptcy protection, they have a fiduciary duty not to wast the company's nor the creditor's assets --- Therefore, regardless of what the company may like to do, they can state that in no way are they going to accept what is, in actaulity, a US Air award tix on any of their planes, post another US bankruptcy.

Randy provides no support whatsoever for his statement that a tix that may be for a United flight, but which in actuality, was paid for with US Air Divident Miles, was redeemed thru a Dividend Miles rep and issued by not United but US Air, and even sports a US Air origination stock number, will be treated by United as a valid tix. I hope so, but absent proof that this is so, I am not so sure.

However, given the circumstances, you have no other choice, IMHO, for it is even less certain that US Air miles in an account will have any value if US Air shuts down, nor are US Air award tix on a US Air plane, that much safer, if the airline decides to shut down.

The only quarrel I have with Randy's pronouncement is that it says somehting without providing any clear proof that this is the case.

However, as a statement that seeks to put the best face on a bad situation, I definitely would agree to use your US Air miles by ticketing on a United flight. I just differ in his certainty that this will be an acceptable escape route for one's FF miles, not with the wisdom of following that advice.

The only quarrel I have with Randy's pronouncement is that it says somehting without providing any clear proof that this is the case.

However, as a statement that seeks to put the best face on a bad situation, I definitely would agree to use your US Air miles by ticketing on a United flight. I just differ in his certainty that this will be an acceptable escape route for one's FF miles, not with the wisdom of following that advice.No one can fully know what will happen in the future, and I do not think Randy's comments can be fairly read as claiming omniscience.

From a purely marketing, customer-relations, and goodwill-generating perspective, the prediction that UA will honor US-ticketed awards on UA flights makes a great deal of sense and carries strong weight with me, given the track record of the man making it.

It is unreasonable to expect such "clear proof" of a future contingency involving the possible demise of a current marketing partner. Also, from a bankruptcy perspective, it would absolutely not be a breach of any fiduciary duty by UA to honor those awards. Rather, it would be a good-faith business move taken in the expectation of obtaining further business from the best customers of the defunct US.