Flying on Bankrupt Airlines
In tough economic times, struggling airlines may declare bankruptcy while continuing flight operations. TravelSense offers these tips to consumers holding or purchasing tickets on any airline that has declared Chapter 11 bankruptcy:
Use a credit card. When selecting an airline that is operating under Chapter 11 bankrupcty protection or rumored to be in financial trouble, you should pay by credit card. Under the Fair Credit Billing Act, credit card customers have the right to refuse paying 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 include coverage in the event of supplier default. However, policies often specifically include or exclude certain companies from default protection. Consult with your insurance provider for details.
File a claim. If an airline ceases operations and all other options for reimbursement fail, including protections offered under the Fair Credit Billing Act, you 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. Be aware however, that the bankruptcy claims process can take months or years and in many cases returns nothing or a small fraction of a consumerâ€™s financial loss.
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