Questions and answers about American's bankruptcy

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by SHELLY SLATER

Bio | Email | Follow: @wfaashelly

WFAA

Posted on November 29, 2011 at 6:56 PM

At the end of the day, you're probably wondering what does the American Airlines bankruptcy mean for you?

  • Are your holiday tickets safe?
  • What about the AAdvantage miles you've accrued?
  • Will fees go up?

Jeff Gunning travels with his architecture business, and he does it on one carrier: American Airlines.

"I have over 5 million lifetime miles with American Airlines," he said. "I fly all over the world."

For Gunning, news of bankruptcy raises critical questions. "I would like to hear someone say your miles are safe."

Rick Seaney with FareCompare.com says historically in bankruptcy, the miles will stand. "Because they are business travelers, the last thing a bankrupt airline wants to do is make their business travelers upset, because that is their cash cow," he said.

In fact, Seaney said American will likely offer double or even triple miles to keep customers from going elsewhere as it restructures.

"You can actually redeem them on some of the partner airlines if you're worried about it... British Airways, Qantas, Japan Airlines," Seaney said.

Other potential changes? Historically in bankruptcy, companies do more to make sure flights are full before takeoff. That could mean great last-minute deals.

But fees could also rise to fill fiscal gaps.

Seaney, however, says flight prices shouldn't be affected. "That is more tied to oil prices than it is bankruptcy," he said.

For business traveler Jeff Gunning, keeping him as a customer means stepping up service.

"There's a lot of competition out there, and you've seen them struggling with changes in service and with what they provide on planes," he said.

All of which will be revisited, as American takes a hard look at its product.

"Bankruptcy used to be, "Don't touch me with a 10-foot pole," Seaney said. "Now, it's business as usual."

The analyst adds that it could take anywhere from 8 months to 2 years for American to emerge from bankruptcy. And when that happens, he predicts, American will have a merger partner.

E-mail sslater@wfaa.com

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