There's good news for travelers who fear their money may take flight if the airline they've booked tickets on declares bankruptcy. There are practical steps travelers can take to protect their travel plans and their money.
Legally, struggling airlines may declare bankruptcy while continuing flight operations. Here are a few tips for travelers to consider when purchasing travel:
Use a credit card. When selecting a supplier that might be be in financial trouble, consumers should pay by credit card. Under the Fair Credit Billing Act, credit card customers have the right to refuse to pay for charges for services not rendered. Details of the Fair Credit Billing Act can be found at the Federal Trade Commission's Web site.
Consider insurance. Some travel insurance policies may include supplier default protection. However, vendors that have declared bankruptcy protection are generally excluded.
Remember Section 145. According to the experts at the American Society of Travel Agents (ASTA), consumers who have purchased a ticket on an airline that ceases operations may be entitled to standby travel on other airlines.
Section 145 of the Aviation and Transportation Security Act provides that airline passengers holding tickets (paper or electronic) from a bankrupt carrier for a particular route are entitled, at minimum, to transportation on a space-available basis on any airline currently serving that route provided the passenger makes alternate arrangements within 60 days after an airline has suspended operations.
Additionally, the maximum fee that an airline can charge for providing standby transportation should not exceed $50 each way. Unless extended, Section 145 is valid through November 30, 2006.
File a claim. If an airline defaults and a consumer is unable to take advantage of the Fair Credit Billing Act or Section 145, he should file a claim with the bankruptcy court. The bankruptcy court usually provides filing instructions, including claim forms, within months after a bankruptcy is filed.
ASTA is the world's largest association of travel professionals. To learn more about your rights as a consumer, visit www.travelsense.org.
Purchasing airline tickets with a credit card can help to protect travelers should the carrier declare bankruptcy.
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