I've watched United, USAirways, Northwest and now Delta fall back from the brink of failure. I've stressed each time what would happen to my frequent flyer miles in a Chaper 7 situation each time.

So my questions...

With Star Alliance, is there a foreign carrier that you consider most financially stable? Also, a foreign carrier with better reward offerings?

Same question with OneWorld and Skyteam...

Several separate questions to consider:

- The stability of the airline is not necessarily the same as the stability of the miles.

- Perhaps you haven't been watching foreign airlines as closely. Some of them (including "national" ones) have failed, then someone else took their place eventually (but they're really a separate airline, even if they carry the same airline code). Belgium's SN (once Savena, now SN Brusels) is a prime example I'm familiar with. Air Tahiti Nui is a more recent one that speculation teeters between going away and being forever propped up by their government.

- Earning ability through flying may be way smaller with foreign airlines. I don't know as much about Star, but in OneWorld, if you buy mostly economy, then AA gives you 100% of miles flown but BA gives you only 25%. AA gives you miles on virtually all fares sold on its website, but some of the foreign carriers give you NO miles at all for many sale fares!

- If upgrading is important to you, you can only upgrade if you're elite with the airline whose METAL you're flying. (Yeah, in theory there's an exception in Star, but so far all comments I hear about that is that it's more theory than reality.) If you're going to be flying mostly in the US, then that means you need to keep up elite status on a US airline, not a foreign one.

- How do you earn miles? Only through flying? If you earn a lot of miles through dining (iDine/Rewards Network), there are very few foreign airlines that participate in it (BA's the only one I've heard of). If you earn a lot of miles through hotel stays at chains like Candlewood Suites, though, which award a puny 1 mile per dollar spent to domestic airlines but a flat mileage (500 in the case of BA) per stay with many foreign airlines, that can be so better that it makes sense to have at least ONE such airline in your collection so you don't waste the miles from such hotel stays. (Well, there is ONE other option: Southwest gives a flat 0.5 credits at most such hotels. But that won't get you overseas, not even with ATA codesharing!)

- There's more than total loss of miles to worry about. There's also devaluation. And here's the grim reality of that: An airline which you'd tend to hate because it's just done a bunch of devaluations is most likely to wait quite a while before doing more devaluations, while the airline you love temporarily because it hasn't done devaluations yet may do them next quarter! Over my course of just a few years of earning miles and points, I've lost way more in effect through devaluation than I would have lost had ONE of the airlines you mentioned gone out of business and their miles gone with them.

If you're not concentrating in one airline for lifetime status or elite status, therefore, I would suggest that the best insurance against airlines going under is not to put all your eggs in one basket. (Certainly not all your miles earned by OTHER THAN flying.) Then even if an airline goes under and the miles vanish, you haven't lost it all, just a portion (just like with a big reward devaluation).

No need to worry about the financial stability of the airline if you burn the miles roughly at the same speed you earn them. IMHO miles are not worth "saving" and thus I always try to burn miles earned within a year. The mileage redemptions level also seems to be climbing up so better burn the miles fast.

I would collect the miles on the US scheme because American bases plans seem to offer lower redemption levels and better opportunity to earn miles.

Well I used to say US airlines, but after yesterdays news from United, I checked and my AF miles are worth more. UA miles were significantly reduced in value. AF miles have held onto their value and they are very strong financially as well as being one of the largest airlines in the world with the KL merger.

It all depends on you. Where do you fly... How often... Where do you want to go...

Most major american airlines are safe as the US Gov supports them and the bankrupcy rules. I would primary stick with one alliance. Most FF miles are not always earned by flying...

If you are always well past the threshold of (re)qualifying for whatever elite status you are (and not within a vacation flight's reach of qualifying for the next level), then that may not be a problem.

But for those of us who most years JUST BARELY make it to whatever elite level we're shooting for, using miles for one of those flights outright (as opposed to upgrades) would keep us from (re)qualifying. (It doesn't matter WHOSE miles we would use, because I know of no airline which lets you earn miles on outright mileage awards, so it's the same danger of not requalifying whether you burn up miles on that same airline, or on some other airline you only earned miles through non-flying.)

For example, in my case I'm primarily with AA, where I just barely get to PLAT (usually all or almost all personal trips!) each year. If I took just one of those many-mile-earning overseas trips a year as an award, I wouldn't get there. At AA, I do burn miles on int'l upgrades, but I can't burn them as fast as I earn them.

Meanwhile, I'm building up miles (through non-flying) in NW and UA and BA for perhaps going to destinations like Australia and Thailand and South Africa someday when I have the time (those are destinations I can't pay-and-upgrade over at AA anyhow, and there's a chance of doing that at NW or UA or BA). I have NO GOOD USE for those miles on anything I can quickly use them for (since I never use miles in place of cheap economy flights, only for high-value redemptions). If I burn all my UA miles now, I have no way to go to Australia via an upgrade next year (if that turns out to be a year I can "afford" to, in time and no problem requalifying at AA). Same for each other airline I have collected miles at.

AF seems good on paper, but they charge you outrageous fees for award tickets (fuel surcharge, which you don't pay on e.g., AA). I spent 50k on a Europe award and had to pay 200 USD in taxes and fees. I am glad my AF account is empty now...

You bring up a good point about surcharges, although I think KL is much worse than AF. It is really aggravating. But I wonder how long it will take US airlines to copy Europe airlines with the surcharges on award flights?

AMEN

I have both domestic leisure trips to earn miles and international ones to redeem, all in coach, so for me it's hard to think of doing anything other than the status game (gold or higher) with double miles or better.

That's the one big thing that foreign airlines generally don't go along with. Not many programs outside the U.S. give double miles to elites on all paid fares. U.S. programs also are well ahead on non-flight earning opportunities, building up even more unredeemed miles. IMO that part will really hit the fan when the first wave of baby boomers retires.

AF gives double miles on all flights except the super cheap coach fares on long hauls. Plus you get bonus for C.

CO already has by charging fees for BF upgds, to the tune of up to 400 dollars each way. Total BS. That'd get you half a Z fare during the fare sale.

Well, it depends.

At iDine, other than BA (and even in terms of bonus promos there), yes.

At rental cars, not necessarily: While ALL rental car places seem to give a platry 50 miles per day with US carries, with some overseas carriers you can do much better. For example, Avis gives 500 BA miles for even a one-day rental.

And with some hotels, it can be a big difference too. At Priority Club's Candlewood Suites, where a room might be say $85 a night, you only earn 1 mile/$ with US airlines, and thus a platry 85 miles for a one-night stay. But with BA (or a number of other European airlnes) you earn 500 miles no matter what the length of stay!

IF you have a Diner's Club card, the seemingly annual 50% transfer bonus to BA only (once upon a time it was even 100%!) also is unmatched by any US program (on the transfer side).

Thus it can make sense to have a "secondary" European airline you collect with "slowly" by non-flying, for those opportunities where you can't earn anything worthwhile with any domestic airline.

And, ironically, those are often airlines you DON'T want to earn by flying. If you fly advanced-booking economy class, you earn only 25% of actual miles flown over at BA. Yuccch! That means I want to credit all my BA intra-Europe flights to AA, and ONLY earn BA by NON-flying!