Even with the continuing supply of cheap airplane tickets and cheap vacation packages some travelers are starting to become concerned over what an American Airlines bankruptcy could mean to them.
It is far from certain whether American will file for bankruptcy. On the one hand it was the only major U.S. airline to lose money in 2010 and is again forecasted to be the only one to lose money this year. On the other hand, at the end of June American had over $5 billion cash on hand and has since been able to arrange financing.
Given that airlines do periodically go bankrupt, the following is some advice as to how to protect yourself:
Always pay for an airline ticket with a credit card. Typically when airlines experience financial problems, credit card processors hold back funds until flights occur. Although credit card companies do not guarantee refunds, often they are able to protect their customers in this manner.
If you purchase a ticket from an airline that is not well known in the U.S., periodically check to make certain it is still flying. Most airlines websites let customers know when they go out of business.
Set up a backup plan in the event your airline goes out of business. Determine in advance which other airlines fly where you want to go.
Do not assume that other airlines will help you in the event your airline goes bankrupt. Competing U.S. airlines no longer honor a bankrupt airlines tickets.
Remember to stay alert and be prepared to act quickly to find the best alternate options if your airline stops flying. Given the size of American Airlines, it is highly unlikely that a bankruptcy would result in it going out of business. www.cheapfares.com