Denver-based carrier still flying, but...who knows? Plus, what to do if your airline goes under
Frontier Airlines has filed for protection under Chapter 11 of the Federal Bankruptcy Act. It is currently still flying, paying its employees and vowing that it will emerge "stronger than ever." Well, maybe. That's what Aloha claimed for a few days just before it ceased operations.
The carrier is saying that First Data, which processes credit cards for tickets, is withholding an excessive amount (to Frontier anyway) of money, resulting in cash-flow problems. Frontier, like other carriers -- is already strapped with a recessionary economy, rising jet-fuel prices and passengers' expectations of low fares. With this scenario, something has got to give, and as it did for three American carriers within a week, it is an airline's viability. Frontier operates more than 20 percent of the flights at Denver International Airport, and 5,000 out of its 6,000 employees are based here.
Protective Measures
Meanwhile, people who paid for airline tickets by credit card have been assuming that the card issuer will refund the cost of unused tickets. This could become a less reliable fallback too. As claims increase to credit card companies for services paid for but never rendered, those refunds could become harder and harder to obtain. Experts advise travelers to dispute charges and file claims immediately.
Meanwhile, also read your travel insurance policies -- if you buy them -- closely to be sure that such contingencies are covered. If your flights are booked as part of a tour package or cruise, the operator or cruise line should be handling arrangements for you. And some savvy travelers are returning to travel agents to make airline reservations, even if a handling fee is involved, because agents have a more direct line and more clout with airlines than do individual passengers
In addition, passengers who are when an airline on which they are ticketed suddenly ceases operating could be really stuck. Once upon a time, federal laws (Aviation and Transportation Security Act of 2001, Section 145) mandated that airlines carry stranded passengers on a space-available basis, but the same feds who passed the law in '01 did not bother to renew it when it expired in 2006. Now, it is technically up the goodwill of remaining carriers to help stranded flyers. With the aforementioned higher fuel prices, their own high load factors and probably no assurance of remuneration, airlines' motivation to help out will likely erode.
Greyhound anyone?
Subscribe to:
Post Comments (Atom)
Posts
I jump from link to link, and Upgrad Travel Better made this observation.
ReplyDeleteEuropean airlines have been charging a credit card surtax for some time, to dissuade customers from charging it. And a few months ago in the U.S., discounts were floated as a way of getting customers to pay by cash. And despite the fact that every airline has an affinity credit card that generates points in their loyalty program, Frontier’s bankruptcy is going to put more pressure on airlines to reduce the reliance on credit.
I suppose Muthu's comment is interesting to some people, but we live in Denver which is Frontier's hub and this diatribe about the internet is not relevent. We read this travel blog because of TRAVEL information.
ReplyDeleteToday's Denver Post ran a story that indicated Frontier isn't out of the woods yet. As a small, lean airline to start with, they don't have a lot of fat to trim -- unlike United which saved billions and fired 25,000 people when it was reorganizing.
ReplyDelete