The Extra Mile

Airline Bankruptcy Causes Mileage Jitters

Q&A: Earning Miles for Someone Else's Flights?

August 25, 2002 - The August 11 bankruptcy filing by US Airways, the country's sixth largest airline, has left many travelers spooked. What, they worry, will happen to our frequent flyer miles?

In US Airways' case, the company has assured members of its Dividend Miles program that the bankruptcy filing will have no effect on their ability to earn or redeem miles. So for now, it's business as usual. But what if US Airways fails in its attempt to reorganize and attain profitability? What if they, or other financially precarious carriers, shut down altogether, as Vanguard Airlines did in late July?

The only option guaranteed to forestall the loss of frequent flyer miles is to use them immediately. That means both redeeming the miles and using the award tickets now, while the airline is still operating its own flights and maintaining relationships with other airlines as award partners.

Don't assume that booking award travel on a healthy partner airline will protect you in the event the host airline -- the program operator -- ceases operations. If the host airline fails and its program is terminated, unused award tickets issued for travel on other airlines participating in the program will almost certainly be worthless.

A second option is to just do nothing. In some past instances, sitting tight has turned out for the best. When American acquired TWA in 2001, members of TWA's Aviators program found their miles auto-transferred into American's AAdvantage program. And more recently, credits earned in the program of bankrupt Midway Airlines were transferred into the program of US Airways, now also bankrupt, as part of a joint marketing agreement between the two airlines.

Lastly, there is a service which allows frequent flyer program members to insure their miles. With AwardGuard (http://www.privilegeflyer.com/), skittish frequent flyers can insure their miles, up to $7,500 worth of award tickets, in the programs of many major airlines, including US Airways'. The cost: $119 for one year, $214 for two. For someone with a large cache of miles, and commensurate anxiety, that might be a small price to pay for peace of mind, mileage-wise.

Readers: Miles on their Minds

Question from Cyril

Would you know how can I get credited with frequent flyer miles when booking flights for my business associates (for example, using Expedia and they pay for the flights)?

Answer

In the scenario outlined, there are two opportunities to earn miles. Unfortunately, neither applies to you.

First, there are miles-for-flying. Flight miles are awarded to the person whose name is on the ticket and actually travels, regardless of who made the booking or paid for the ticket.

And second, miles can be earned when purchasing the tickets, by charging them to a mileage-earning credit card. Airline-affiliated credit cards normally reward cardholders with one mile for every dollar charged, and two miles for every dollar charged when purchasing the airline's tickets.

But, since you are neither the actual passenger nor the purchaser, your hard work in planning and booking trips for co-workers won't generate a single mile in your frequent flyer account.