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Insta-Cogo: Where Have All the Airlines Gone?

Cindy Loose

Has there ever been a time when three U.S. airlines suddenly ceased operations in a matter of a few days? Before last week, I mean. They fell like dominoes: Aloha, ATA, Skybus.

First, a quick roundup for passengers who happen to be holding tickets: All three recommend that passengers seek refunds from their credit card companies. All three say that passengers who paid by cash or check will have to line up with other creditors at bankruptcy court. Good luck with that.

Aloha has been able to get some passengers on alternative flights with other airlines. Passengers who were flying ATA as part of a codeshare arrangement with Southwest are in the best shape: Southwest is saying it will either rebook such passengers without charge or give them a refund. (For help, call 800-308-5037.)

Skybus advises that "more information for customers and others will be made available on the Skybus Web site . . . as it becomes available." Please, don't hold your breath. Meanwhile, if you purchased a Skybus seat by credit card, ask for a refund.

The main point is pretty clear: Always pay for services with credit card because if a good or service isn't delivered, chances are the credit card company, instead of you, is left lining up in bankruptcy court.

None of this is to say you need worry that a major U.S. carrier will suddenly cease operations. They have too many assets to suddenly cease operations. But if flying a smaller carrier, or buying another travel service from a troubled company, beware. One option, besides paying by credit card, is to buy travel insurance. But be careful then, too.

First off, buy travel insurance from an independent source rather than from the travel provider, advises John W. Cook of QuoteWright.com, an online travel insurance comparison site that allows consumers to compare various offerings. Cook notes that policies offered by tour operators, cruise lines and airlines generally don't cover their own financial default.

Also read the policy you're considering to see if it excludes the default of certain companies. One major insurance company, Access America, provides a list of companies they WILL COVER if they suddenly disappear. Travel Guard and Travelex instead lists companies it will NOT COVER in case of default.

Cook also urges that consumers buy travel insurance soon after making a deposit for a trip because default protection is only available if you purchase your travel insurance within a certain time period of your initial deposit -- generally 10 to 21 days.

Questions? Comments?

By Cindy Loose |  April 9, 2008; 6:16 AM ET  | Category:  Airline Industry , Cindy Loose , Insta-CoGo
Previous: Your Turn: Cell Phones in the Air? | Next: Insta-Q&A: Planes, Trains and Great Danes

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What if you bought the ticket on a credit card, but already paid off the credit card? Will I still be able to get a refund from the credit card company?

Posted by: screwed | April 9, 2008 8:42 AM


Whether or not you paid the bill isn't relevant. If you paid for a service that wasn't delivered you can apply for a refund. I'm not guaranteeing you'll get it, but it should work out for you.

Posted by: cindy loose | April 9, 2008 9:03 AM

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