Bankrupcy and Miles
May 8, 2002, 8:25 am
#2
Join Date: Sep 2000
Location: Jersey Isle
Programs: BA Gold, BMI Gold, LH Senator, Hyatt Diamond
Posts: 1,175
I guess I among the few that think US will survive, at least planning on that through this year.
Just disappointing to say another naysayer pop up every now and then talking about bankruptcy. I think the important issue is announcement of an alliance which we are all hopefully awaiting. Great things will happen when this takes place you'll see!
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"Fly me to the moon and let me earn alot of miles."
Just disappointing to say another naysayer pop up every now and then talking about bankruptcy. I think the important issue is announcement of an alliance which we are all hopefully awaiting. Great things will happen when this takes place you'll see!
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"Fly me to the moon and let me earn alot of miles."
May 8, 2002, 8:27 am
#3
Join Date: Dec 1999
Location: Matthews, NC
Programs: AA AAdvantage Gold, HHonors Gold, Marriot Bonvoy Gold, Hyatt Member
Posts: 1,459
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Uflyer:
If U files for bankrupcy, what does that mean for miles, redemption and accumulation, etc. Do we lose everything?</font>
If U files for bankrupcy, what does that mean for miles, redemption and accumulation, etc. Do we lose everything?</font>
I agree with worldbanker - the sky is not falling - and the airline has been through worse (see the early '90s for example) without filing for bankruptcy. Don't assume they'll have to file here.
So, you probably won't lose everything - you may lose nothing - just wait it out - see just what Siegel puts out there as the plan. After all, if they do apply for ATSB funding, they seem to have until June 28 to do so. There will be plenty of notice before something goes really wrong. If the airline were to file for liquidation (I think that's Chapter 7 or somewhere thereinabouts - I'm a lawyer, but I don't touch the bankruptcy stuff) then there's a problem.
And if you're really concerned about your miles - then consider AwardGuard - one of Randy Peterson's programs. Or start redeeming left and right.
[This message has been edited by CLTFlyer (edited 05-08-2002).]
May 8, 2002, 8:31 am
#4
Original Poster
Join Date: May 2002
Posts: 137
I don't want to come across as a naysayer,I am praying that U can make it through this as I try to fly them everywhere I go. (U offers the best service in the industry). I am just really concerned that if we can't get the loan, then we may run out of money before any benefits from the restructuring can be realized......
May 8, 2002, 10:10 am
#7
Join Date: May 2001
Programs: UA 1K, US LT Silver, AA Plat, Marriott LT Plat, Hilton Gold, Hyatt Platinum, Starwood Gold
Posts: 790
I'm not worried either. BUT, only because I purchased insurance to cover the 2 million miles my wife and I have on US (and that's after 2 first class tickets on Swiss to Nairobi in July and 2 first class tickets to Barbados and Grand Cayman for Memorial Day and July 4th weekends). I love US, but I have all but stopped flying them because I have too much invested already. Consequently, I just made Gold elite on Continental, but it's not the same. I only get upgraded half the time (and I can't remember the last time I didn't get upgraded on US). I am still wondering how in the heck they keep winning the Freddie and JP Powers Awards. Oh well, at least until US announces an alliance partner or I feel that Siegel is turning things around, I'll keep flying Continental.
[This message has been edited by romadaro (edited 05-08-2002).]
[This message has been edited by romadaro (edited 05-08-2002).]
May 8, 2002, 6:42 pm
#8
Join Date: Oct 2001
Location: Somewhere...
Programs: AA PLT/3MM, UA GM/1MM, DL DM/1MM, FB Plat, AS MVP Gold, WN AList+
Posts: 1,588
I too shook off US this year because I have too much 'invested' in the program, even though it is 'only' around 250K. However, it is important to remember some of the following before dashing for the window....
1) US's FF program is one of it's most important 'assets' (gobs of high rev. pax) even though it is technically a debit.
2) AA coughed up $650M last for an airport (STL) and a frequent flyer program (no other assets) much smaller than US's - with a lot less lucrative member base. All TW miles were fully protected much to the irritation of many AA members due to the somewhat liberal attitude TW had taken towards padding member's accounts in recent years.
3) US is not Midway - any failure of US will take place over years, unless the airline sells it's pieces off, with the FF base being one of them (How much do you DL would pay to get the US customer base for north south traffic along the east coast). Remember PA and EA accounts (as well as CO through two trips to federal court) were fully protected even when the firms were fully liquidated.
1) US's FF program is one of it's most important 'assets' (gobs of high rev. pax) even though it is technically a debit.
2) AA coughed up $650M last for an airport (STL) and a frequent flyer program (no other assets) much smaller than US's - with a lot less lucrative member base. All TW miles were fully protected much to the irritation of many AA members due to the somewhat liberal attitude TW had taken towards padding member's accounts in recent years.
3) US is not Midway - any failure of US will take place over years, unless the airline sells it's pieces off, with the FF base being one of them (How much do you DL would pay to get the US customer base for north south traffic along the east coast). Remember PA and EA accounts (as well as CO through two trips to federal court) were fully protected even when the firms were fully liquidated.
May 9, 2002, 7:59 am
#10
Original Poster
Join Date: May 2002
Posts: 137
CoMooter - your information is greatly appreciated. I can breathe easier now. Although, I have read that there is strong opposition to eliminating the ATSB loans in the House. Hopefully this will be good for U. I hate to see such a good airline fall. Like many other posts I've read on this board, I also believe U has the best customer service in the industry. Only when I fly U do I not feel like cattle being thrown on board. Best of luck to all the employees.............
May 9, 2002, 8:11 am
#11
Join Date: Oct 2001
Location: DTW
Programs: BW Diamond, Choice Plat, National Exec Elite
Posts: 3,120
Comooter -
On points 1 and 2, you have valid arguments, but on point 3, you make a dangerous assumption. It would take years for U to fail? Not necessarily. No they are not Midway, but neither was Ansett or Swissair. Both of those shut down very suddenly, following some well publicized financial problems.
Nobody ever thought PanAm would fail, even after DL left them at the altar. But the money people wasted no time shutting down the airline when it became obvious that they couldn't continue. And let's face it, Frank Lorenzo lost the gamble of OnePass when Eastern shut down. Had EA had a stand alone FF program, they would've been out of luck, IMO.
But I agree with those of you who feel the Dividend Miles will be protected in some way, should U file CH.11. My hunch? It'll be similar to a TW bankruptcy, except that the airline won't go lock,stock, and barrel to another carrier. It'll be broken up, unless they can find a way to lower costs dramatically in the same manner that Alaska Air had to do when faced with the Southwest threat.
On points 1 and 2, you have valid arguments, but on point 3, you make a dangerous assumption. It would take years for U to fail? Not necessarily. No they are not Midway, but neither was Ansett or Swissair. Both of those shut down very suddenly, following some well publicized financial problems.
Nobody ever thought PanAm would fail, even after DL left them at the altar. But the money people wasted no time shutting down the airline when it became obvious that they couldn't continue. And let's face it, Frank Lorenzo lost the gamble of OnePass when Eastern shut down. Had EA had a stand alone FF program, they would've been out of luck, IMO.
But I agree with those of you who feel the Dividend Miles will be protected in some way, should U file CH.11. My hunch? It'll be similar to a TW bankruptcy, except that the airline won't go lock,stock, and barrel to another carrier. It'll be broken up, unless they can find a way to lower costs dramatically in the same manner that Alaska Air had to do when faced with the Southwest threat.
May 9, 2002, 8:34 am
#12
Join Date: May 2001
Programs: UA 1K, US LT Silver, AA Plat, Marriott LT Plat, Hilton Gold, Hyatt Platinum, Starwood Gold
Posts: 790
All good points. I have no doubt that should US fail, someone will pick up the frequent flyer customer base, which is US'greatest asset. However, I've just got far too many miles in the program to keep piling them up in this age of uncertainty. I truly miss flying US and find myself sitting on Continental comparing the service between the two and US wins, hands down, in my opinion. I am praying that Siegel can turn this thing around so I can start "flying the flag" again!
May 12, 2002, 11:14 am
#13
Join Date: May 2002
Posts: 45
On a related topic, I am flying AZ in late Sept to Rome using US miles. If the carrier does, by chance, declare 11 before then, is my ticket impacted? Since I am flying on US ticket stock, will AZ accept the ticket? Should I consider alternative, albeit, much more expensive options like purchasng a ticket. If 11 were to cause a problem with AZ, I figure it is better to prepare now rather than close to the travel date when purchasing a ticket could be much more expensive. Any insights are appreciated.
May 12, 2002, 1:43 pm
#14
Join Date: Apr 2001
Location: Indianapolis, IN USA
Posts: 2,066
Thanks for the information - I'm 90% US Airways and have watched my account grow rapidly this year (mostly due to bonus points, etc.).
Being in IND US Airways is a major carrier - although certainly less so then 5-10 years ago.
Being in IND US Airways is a major carrier - although certainly less so then 5-10 years ago.
May 12, 2002, 4:47 pm
#15
Join Date: Apr 2002
Location: Greensboro, NC (US Air CP = Compassionate Proctology, Hilton Diamond)
Posts: 304
If you really get nervous, then I would suggest you diversify your portfolio. One way I do so is to have my hotel and rental car FF miles go to AA, my back up airline for locations where US Air does not fly. In addition, I pick up about 1000 miles on AA each month using the cereal coupons...I have three small kids who live on cereal!!!