What happens to ticketholders?
 

Forgive me for my ignorance, but I am new to all of this. I bought tickets to ATL for early Jan because they were about a quarter of the price of Delta. Just wondering...do other airlines honor tickets if a carrier goes out of business? Should I be making other plans now? I am so disappointed because I was about to get my free flight. :(

If FlyI shuts down (and it is likely that it will, once it runs out of cash), other airlines have to honor your ticket on a standby basis. That means you will board last, after all other revenue pax and probably after that other airline's nonrevs. If you have lots of spare time, it might be fun to do once in one's lifetime. ;)

Once it shuts down, you probably won't get your money back. OTOH, if you make other plans now and cancel your reservation, your credit card company may allow a chargeback and you might get your ticket price credited to your CC statement.

If I were you, I'd make other plans. Check out Airtran. Their fares, like those of B6 and WN, are fair but are also high enough to allow for profits and continued operation.

And that standby comes with a $50 fee each way.

If you paid by credit card, the general feeling is that you can quite easily dispute the charges in the event of a FLYi shutdown.

Be warned that if you cancel in advance and request a chargeback, you could be held liable for the charges in the event Independence does complete the flights.

How is this accomplished? Is there a federal law that requires the airlines to provide standby travel? I can't see the airlines willingly providing travel to stranded travellers for no compensation. Does you government cover the cost of bringing customers home.

Up here in the Great White North, there have been two airline failures since 2001 (Canada 3000 in November 2001 and Jetsgo in March 2005). These failures were two small airlines with about 10% market share.

In both cases the major credit card companies (Visa, Mastercard, Amex) covered their client's loss. Client's had to submit a claim form and assign the debt rights over to the credit card company. Basically the credit card company bought the debt at a 1:1 ratio and took the bankruptcy haircut at cents on the dollar.

The unusual (from a customer perspective) is that in order to file a claim a customer must wait until after the outbound flight departure date. Example; if DH shut down today, the earliest you can get money taken off the credit card balance is early January.

Cancelling your DH reservation and attempting the credit card chargeback route will not be sucessful unless the ticket provisions allow for a full refund. In a chargeback situation, you must prove that the service provider has not performed services or produced goods or failed the contract terms, otherwise there is a valid contract that customer must abide by.

IMHO the OP option's are:
1) Do nothing and take the risk that Indy might fold before flight time.
2) Hedge their bets with a refundable ticket on another airline (expensive).
3) Cancel the DH reservation and take the financial hit, rebook with a more stable airline.
4) Most tricky. If the OP has unbooked flying between now and January. They could cancel the January DH reservation and apply the credit file (MCO) for the earlier travel on DH. Book the January flight with another airline.

I thought that law expires 11/18.

There is such a federal law, and it was recently extended, IIRC. The government pays the airlines nothing - as the pax pay $50 and fly standby.

My suggestion about the credit card chargeback was based on the discussion by the OP in this thread:

http://www.flyertalk.com/forum/showthread.php?t=493203

Dunno how successful the chargeback scheme may be, but given that Canada and the USA are two different countries (with different laws applying to credit card transactions), specific advice is, of course, difficult. ;)

I think I heard the other day that it has been extended.

I believe it has. http://www.congress.gov/cgi-bin/bdqu...temp/~bdErIw::

It is Amendment 2103 to H.R. Bill 3058. Senator Burns (R-MT) was the sponsor. It looks like it was passed by the Senate on 10/20/2005 and extends Section 145 of the Aviation and Transportation Security Act to 11/30/2006.

Thanks for everyone's advice. Just got full credit from my credit card. Off to find a new flight.

Has anyone read through the law? My fuzzy recollection was of a $35 fee. Is it $50?