AA & United MILES PROGRAMS to end soon...?
 

A travel expert is forecasting that AA, United, and US Airways may enter into bankruptcy in a few months - and as part of that you would no longer be able to redeem miles for flights.

See: http://www.king5.com/sharedcontent/n....39d331d2.html
This expert says: "To protect yourself, the first thing you should do is use your frequent flier miles as soon as you can. If they go bankrupt and they liquidate the carrier, the miles will be worthless.”

Does anyone have more information on this likelihood?

Self-proclaimed "expert" knows nothing here.

DL, UA, US and NW have all been to Chapter 11 in the past 5 years. There was no impact to any frequent flyer miles.

Only in Chapter 7 bankruptcy (liquidation) would losing miles be an issue.

The other issue is the airlines make a lot of money selling miles to the credit card companies, hotels, etc. They are not going to wipe out everyone's miles and kill one of their profit centers.

Welcome to FlyerTalk.

The "expert" is actually a moron on this particular topic. Yes, the miles could become worthless. But even in a Ch7 filing there is a very good chance that another carrier would assume the FF program of the failed carrier - outstanding mileage balance liabilities and all - to pick up those extra customers. The risk of the miles disappearing completely is relatively low.

IMHO the FTers' comments above that miles will probably not blow-up are likely correct.

But the chance of losing my million or so miles makes me nervous. :(

So, I am trying hard to burn miles, even in cases where I would have previously purchased a ticket to earn miles.

For example, I just used 45K of NW Worldperks miles for a transcon ticket in F. Not the best use of miles, but, I'd rather use it than lose it.

Burn, baby, burn! :D

Holding a million is somewhat foolish. They don't accrue interest or increase in value over time in any other way. But having a couple hundred thousand tucked away for a pair of F seats somewhere a long way away is not a horrible thing either.

Now, now--be nice. :(

Problem is, what with credit card bonuses, etc., the miles have been coming in faster than I can use 'em up.

But, I am trying.

Now, if only I could kick the churning habit... :D

Having Platinum (or higher) status on AA for example further complicates this by making the paid for ticket 'earn' RDM's. Thus for example when burning miles on a simple domestic ticket that would have cost up to $400, using 25K miles and NOT earning the near 10K RDM's (assuming coast to coast flight) make the cost of the flight closer to 35K miles IMO. Further not getting the 5K EQM's is also problematic for those of us who are boarder line on re-qualifying...

But, I'm sure you knew this, just thought I'd state it. :D

I actually tend to burn miles by flying my family (that don't happen to have status on AA) to visit when the purchase prices are high. I explain that the flight counts as both Christmas and Mothers day present :)

Yeah, that's generally my attitude- use miles/vouchers that don't accrue mileage for the family members who DON'T have elite status, use cash for the person (me) who DOES (and accrues EQM/RDM at the better rates).

Or you could upgrade flights- for pleasure or mileage runs to keep elite status.

For instance, a TATL mileage run/quasi-vacation where it's 25,000 miles + a copay one-way to upgrade... if you're flying from the West Coast and have top elite status on the airline, and you're willing to tolerate Y during daylight hours and spend the mileage for sleeping, you basically end up mileage-neutral on the RDM (with the right set of stops, you'll get ~6,000 flight miles each way, so you'll be at around 25K EQM, assuming 100% bonuses), but you now have 12,000 shiny new EQM for next year's status (even more if you're in DEQM season).

Or travel more. ;)

This time around, the chances that members of a FFP operated by a Chapter 7-filing carrier would face little to no risk of losing a lot of value from the miles is anything but "very good". Some major US carrier is going to go under sooner or later and most of the miles in that carrier's FFP are going to see the value mostly or entirely wiped out. Still, this "expert" is jumping the gun way too soon and widely.

If an airline goes into Chapter 7, then yes, the miles are worthless and there is no assumption another airline will purchase the failed carrier's miles or be nice to their loyal passengers. Especially in this economy.

Secondly, when Ansett went bust, many Star Alliance airlines refused to board passengers holding Ansett issued reward tickets- those airlines weren't going to get paid.

Thirdly, when UA filed chapter 11, a few of their partners didn't want anything more to do with them so a few earning/redeeming options were eliminated, but I don't think AA/DL/UA will disappear completely just yet.

Why do you feel this way? The cost of the liability (outstanding mileage balances) would be outweighed by the value of the asset (loyalty base, CC partners, etc.) IMO, even in this economy.

Now that's a real expert. ^

My philosophy is similar: Always have enough miles available in case I need to make an emergency trip to Bali in F.

Mike

I agree with this, even in Chapter 7 one of the remaining majors will pay for the program and take it on to gain the loyalty of those customers. The only assets of value that any of the major legacy carriers have are: 1) Their brand-name; 2) Their loyalty program; and 3) Airport slots at LGA, DCA, and LHR. If an airline went Chapter 7, those assets will be sold to pay creditors something. Everything else is pretty much worthless and/or already mortgaged. Even owned aircraft (not that any of the majors have many left that aren't mortgaged already) are next to worthless in the current business environment.

Ansett's situation is completely different because the Australian market was much less competitive so there was no incentive for a competitor (i.e., Qantas) to try and win over those passengers, they got those passengers by default. The same is hardly true in the US market where if a major legacy airline goes belly-up there are still four legacies plus several large LCC's that will be competing to win those customers.