Little impact for fliers from American Chapter 11

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by SCOTT MAYEROWITZ

Associated Press

Posted on November 29, 2011 at 11:39 AM

Updated Tuesday, Nov 29 at 3:15 PM

For the 240,000 passengers who fly American Airlines each day, the airline's bankruptcy filing should have little noticeable impact.
  
AMR Corp., the airline's parent company, said that it will continue normal flight operations as it heads to federal court to restructure. The move is aimed at reducing AMR's hefty costs, including for labor.
  
Delta, United, Continental and US Airways have all gone through Chapter 11. Travelers continued to book tickets. Planes still took off and landed and frequent flier miles were still earned and redeemed.
  
The only risk to passengers is if the restructuring fails, the airline ultimately liquidates and ceases to fly. Still, many travelers are protected in that case if they bought tickets with a credit card.
  
As for frequent flier miles, Eastern Airlines, Pan Am and Trans World Airlines all ceased flying but miles in their programs were transferred over to other airlines that bought some of their assets. TWA miles actually went into American Airlines' frequent flier program, AAdvantage.
  
"Miles are safe," said Gary Leff, co-founder of frequent flier site MilePoint. He said the bankruptcies of past airlines "are instructive." He even suggested there might be some promotions to keep loyal travelers.
  
American is the nation's third-largest airline behind United Continental Holdings Inc. and Delta Air Lines Inc. Like its rivals, American has raised fares over the past year to offset the high cost of fuel. But for AMR, it hasn't been enough.
  
AMR said fuel costs rose 40 percent in the third quarter. Combined with AMR's much higher labor costs, that resulted in a $162 million quarterly loss for AMR, while Delta and United had a combined profit of $1.2 billion.

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