Originally Posted by
GUWonder
It's not a given that the cost of the liability from acquired accounts would be less than the value gained from maintaining those accounts at full value as marketed currently to customers -- especially not in this economy.
No, it is not a given. But it is also not a given in the other direction.
Since the prorgam would be acquired at a discounted rate that is going to help the acquiring carrier. And buying the loyalty of those customers has way too much potential upside for all of the other carriers to simply walk away, IMO. Even if the program was acquired/integrated with a sunset provision (old points die after N years) the consumers still won't be left completely out in the cold.
The story basically stated that if a carrier goes Ch7 the points are guaranteed to be lost: "If they go bankrupt and they liquidate the carrier, the miles will be worthless." There is a chance that will happen. But there is also a rather significant chance that it will not. I'm betting on the latter.
The guy also suggests, "If you're buying a big ticket – Asia, Australia, Europe – for the fall or winter, you should seriously consider buying travel insurance so at least you’ll get your money back." Of course, he's mostly talking to a US-based customer base who is almost certainly buying such "big ticket" trips on a credit card. And if the carrier fails the CC company is on the hook, not the consumer, for the ticket costs. The consumer can just get their money back from the CC company.
He's spewing out bad advice and I have no qualms about saying so.