Miles are safe from bankrupcy assumption
#1
Original Poster
Join Date: Apr 2001
Posts: 3,083
Miles are safe from bankrupcy assumption
I have a lot of Delta miles and hope as in the case of TWA, UAL, etc. my 'miles are safe.'
At the end of the day we are unsecured [miles] creditors. Recent bonuses like the 35% Amex transfer bonus make me very suspicious as a business owner...these sort of tactics are used by companies that are about to go out of business in order to get assets that are not theirs.
Delta could be the first exception to our 'miles are safe'...regadless of how loud we get.
I could see it very likely for them to 'half our miles' [or worse] as part of the restrucuturing.
Thoughts??
At the end of the day we are unsecured [miles] creditors. Recent bonuses like the 35% Amex transfer bonus make me very suspicious as a business owner...these sort of tactics are used by companies that are about to go out of business in order to get assets that are not theirs.
Delta could be the first exception to our 'miles are safe'...regadless of how loud we get.
I could see it very likely for them to 'half our miles' [or worse] as part of the restrucuturing.
Thoughts??
#2
FlyerTalk Evangelist
Join Date: Nov 2004
Location: 45° North
Programs: DL DM MM, HH Diamond
Posts: 10,196
I don't know how likely this scenario is, but IMO, if it is the difference between loosing Delta all together, or loosing half of my miles, I would go with the latter. I fly Delta because I think it is a great airline with great people, the miles are just a perk, but by no means, a necessity.
#3
FlyerTalk Evangelist
Join Date: Feb 2002
Location: San Francisco/Tel Aviv/YYZ
Programs: CO 1K-MM
Posts: 10,762
I'd rather lose delta and keep the miles in some form with some suitor..
#4
Original Poster
Join Date: Apr 2001
Posts: 3,083
Originally Posted by entropy
I'd rather lose delta and keep the miles in some form with some suitor..
Legally, all the miles could just evaporate and yet no one seems worried about this.
#5
Join Date: Dec 2002
Location: eastern Europe & NC
Posts: 4,527
If DL (or any airline) cancelled my miles, I would never darken their doors again. I'd rather take a Greyhound bus than an airline that would pull such a stunt.
#6
Join Date: Dec 2001
Location: Orlando, FL, USA
Posts: 2,398
While I can certainly understand the concern, there are just too many other more important things in life to me than spending time worrying if we will lose any/all of our miles.
#7
Join Date: Jun 2004
Location: SDF
Programs: DL DM (1.1MM), MR TEL, HH DL, Avis P+ National Ex+, blah blah blah
Posts: 1,033
Loyalty?
Originally Posted by upgrader
While I can certainly understand the concern, there are just too many other more important things in life to me than spending time worrying if we will lose any/all of our miles.
If any airline (or its successor) suddenly and massively devalues an award that I have "worked for" by showing them loyalty then I am MUCH less inclined to continue to provided them with any of my business. That is largely why miles programs don't "go away" (ie UA, US, etc.) when an airline files Ch. 11 and why other airlines are often willing to pick them up if Ch. 7.
And although worry might be a bit strong, I could see where some people could be concerned for their significant accumulation of miles that they've built up over a long period of time. Remember, they do have value for award travel, charity, etc.
Just my $0.02
#8
Join Date: Oct 2003
Location: SF
Programs: /usr/bin
Posts: 1,334
Originally Posted by Carolinian
If DL (or any airline) cancelled my miles, I would never darken their doors again. I'd rather take a Greyhound bus than an airline that would pull such a stunt.
#9
Suspended
Join Date: Jun 2005
Programs: Continental Gold Elite, United Premier Executive
Posts: 6,766
1. AFAIK, frequent flyers are not considered unsecured creditors within the context of US Bankruptcy laws.
2. If there is an economic argument justifying the assumption of SkyMiles by another airline, then the miles will be assumed for those SM members covered within the argument. All members might have all of their miles assumed, or Platinum Medallions living in targeted markets only might get 50% of their miles assumed - there's no way to know this definitively beforehand, and let's hope that the events necessary to force consideration of this issue do not occur.
2. If there is an economic argument justifying the assumption of SkyMiles by another airline, then the miles will be assumed for those SM members covered within the argument. All members might have all of their miles assumed, or Platinum Medallions living in targeted markets only might get 50% of their miles assumed - there's no way to know this definitively beforehand, and let's hope that the events necessary to force consideration of this issue do not occur.
#10
Join Date: Sep 2004
Location: (not Montana. Nor is my name really Helena, nor am I female)
Programs: Delta, USAirways, Starwood, Priority Club, Marriott, Amex
Posts: 2,557
Originally Posted by HeathrowGuy
1. AFAIK, frequent flyers are not considered unsecured creditors within the context of US Bankruptcy laws.
2. If there is an economic argument justifying the assumption of SkyMiles by another airline, then the miles will be assumed for those SM members covered within the argument. All members might have all of their miles assumed, or Platinum Medallions living in targeted markets only might get 50% of their miles assumed - there's no way to know this definitively beforehand, and let's hope that the events necessary to force consideration of this issue do not occur.
2. If there is an economic argument justifying the assumption of SkyMiles by another airline, then the miles will be assumed for those SM members covered within the argument. All members might have all of their miles assumed, or Platinum Medallions living in targeted markets only might get 50% of their miles assumed - there's no way to know this definitively beforehand, and let's hope that the events necessary to force consideration of this issue do not occur.
Regarding a possible dissolution or massive devaluation of Skymiles, isn't it possible that they could be honored by an airline or airlines that do not merge with/take over Delta or purchase liquidated assets? I mean, even if Delta suddenly evaporated entirely, wouldn't other airlines scramble to recruit all those frequent flyers previously loyal to Delta? And wouldn't they figure out that one way to inexpensively recruit loyalty to the new airline would be to honor the abandoned flyer's Skymiles (or, more likely, to convert them, probably at a discounted rate, into the new airline's program)? Or is that just wishful thinking (for instance, I can see how verification would be a problem, without access to Delta's Skymiles database).
#11
Join Date: Jun 2004
Location: SDF
Programs: DL DM (1.1MM), MR TEL, HH DL, Avis P+ National Ex+, blah blah blah
Posts: 1,033
Originally Posted by Helena Handbaskets
... I mean, even if Delta suddenly evaporated entirely (ie Ch 7 - JJ), wouldn't other airlines scramble to recruit all those frequent flyers previously loyal to Delta? And wouldn't they figure out that one way to inexpensively recruit loyalty to the new airline would be to honor the abandoned flyer's Skymiles (or, more likely, to convert them, probably at a discounted rate, into the new airline's program)? Or is that just wishful thinking (for instance, I can see how verification would be a problem, without access to Delta's Skymiles database).
I don't know if it would be inexpensive even though the miles are considered an outstanding liability to DL. As part of the BK settlement, their creditors would want compensation for something that would have value (loyal customers) to another airline. The airline that would assume such a liability would not want to devalue the miles or "cherry pick" the customer base too much for fear of alienating those customers that they just paid to try to obtain. If it were to go this far, (which I don't think will happen) I don't think that verification would too much of an issue as the FF list and mileage balances would be what they are buying.
#12
Join Date: Aug 2000
Posts: 1,739
Originally Posted by entropy
I'd rather lose delta and keep the miles in some form with some suitor..
#13
Join Date: Sep 2002
Location: Wellington, Florida
Programs: Delta Plat, HH Diamond, Marriott Gold
Posts: 830
I, for one, hope the miles will be safe. Last night I transferred 100,000 miles to get the 35 percent bonus that ends 9-15-05
Last edited by traveler4ever; Sep 13, 2005 at 9:15 am Reason: keyboard didn't space...
#14
Join Date: Mar 2002
Location: Madison, NJ
Programs: DL PM, Marriot Platinum
Posts: 2,560
If DL were to halve our miles during the restructuring (which it likely will not), it would be disastrous. During and when it emerges from bankruptcy, it needs its customers. The market is too competitive for DL to do anything drastic that would drive away customers. Something more likely to happen would be reductions in award tickets or scale backs in mielage upgrades. IMO, the miles are not a huge liability mostly because they are something they can control. Having miles sit in our accounts costs DL nothing. It only costs them when we use them. Restricting usage reduces costs associated with the program. And it could be a very slight reduction which would not anger customers, but would also help the bottom line.
#15
Original Member
Join Date: May 1998
Location: NJ
Posts: 3,335
Originally Posted by HeathrowGuy
1. AFAIK, frequent flyers are not considered unsecured creditors within the context of US Bankruptcy laws.