Question on Chapter 11

I live in Canada and am interested in flying out of Detroit to New Orleans in February. The airline that is non stop and a good price is currently under Chapter 11. If the airline goes under and stops flying do I just lose my money or is there any protection? I want to book but I don't understand the situation. Thanks for your help.

You are talking about Northwest -- yes, they are currently under Chapter 11 protection, as is Delta. There are no guarantees on anything (your cruise line might fold before your trip - same with your hotel) but I am booking my personal tickets on NW without concern. They are working out their labor issues and have some valuable assets, so I don't see them closing the doors and going Chapter 7.

Of course, you have to make your own risk assessment evaluations. Just how risk-adverse are you?? Only you know that answer. I'm willing to make the "bet" that they will be around and operating when I'm travelling. My own feeling (and this is NOT to be construed as advice) is that they go under in less than 5% of the future scenarios. Again, just my own assessment. If you don't want to make that "bet", either purchase insurance that will cover a cessation of operation OR pick another airline and recognize that any higher costs/connecting routing is the "price" for your decision not to purchase from NW.

It all comes down to Adam Smith in the end.....

As far a "protections" go....there is a US Federal law requiring other US carriers to carry passengers of an airline that goes under. However, there are caveats - the airline must fly that route, the pax get transported on a space-available standby basis only after all other paid passengers on the transporting carrier are accomodated, there is a $50 per-person fee to the transporting airline, and the law is currently set to expire on November 30, 2006. Also, no refunds on tickets from carriers that cease operations.

I live in Canada and am interested in flying out of Detroit to New Orleans in February. The airline that is non stop and a good price is currently under Chapter 11. If the airline goes under and stops flying do I just lose my money or is there any protection? I want to book but I don't understand the situation. Thanks for your help.

You may want to check & see if you book through an Ontario TA if you will be covered under the Travel registry compensation fund?

If you book directly with airline you are not coverered...remember Jetsgo!

http://www.tico.on.ca look under "consumers"

I had a flight booked on Northwest earlier this year that was scheduled right on the cusp of a potential strike. What I did to ease my mind was that I booked a refundable ticket on a more stable airline in case something happened with Northwest. Nothing did and I got my money back for the un-used flight. Had something happened, I would have lost out on the price I paid for the Northwest flight.

Thank you all for your replies.

Flyertalk, yes it is Northwest, I didn't know if I could mention names. I was not the one concerned about booking. My brother-in-law who lives in Windsor didn't want to book with NWA right now because of all the talk of strike etc down there. I needed some info to convince him. Thanks for the info about insurance I have been looking into that.

LHT28, I phoned one of the large online booking agencies that has a Canadian counterpart and sure enough they are covered under TICO. It is a little bit more expensive but a lot more secure.

CruisinMatt, thanks for your suggestion but I don't think I want to book with two airlines. I hope I don't regret it.

Thank you all for your replies.

 

I didn't know if I could mention names. I was not the one concerned about booking. My brother-in-law who lives in Windsor didn't want to book with NWA right now because of all the talk of strike etc down there. I needed some info to convince him. Thanks for the info about insurance I have been looking into that.

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I spoke with a friend who is a rep for NW ...he assures me things are bing worked out.

They have so many unions to deal with at the moment...he said they are doing OK.

for a minimal fee you can get travel insurance that covers airlines going under after you book~ we have travel insurance for our europe rt in June and it was $125 pp but well worth it considering we would lose over $2600.

$125 pp? Yikes!

My TA here (when I use her) charges £5 per ticket for scheduled airline failure insurance. I hate paying it because the airlines I usually fly when I buy tickets from her are at absolutely no risk of going under, but her company has now made it compulsory to do it.

for a minimal fee you can get travel insurance that covers airlines going under after you book~ we have travel insurance for our europe rt in June and it was $125 pp but well worth it considering we would lose over $2600.

Actually most travel insurance (there may be some exceptions) does NOT cover airline shutdowns if the bankruptcy was filed before the insurance is purchased. The Northwest and Delta bankruptcy's were filed last October I believe.