Do Bankrupt Airlines Fly Away with Your Miles?

Physician's Money Digest, March 2006, Volume 13, Issue 3

If you are a physician who does a lot oftraveling, you've probably racked up agood chunk of frequent flyer miles withyour favorite airline. But what happens toyour hard-earned miles if the airline goesunder? With big-name airlines such asUnited, Delta, and Northwest filing forbankruptcy, fear has arisen that theirrewards programs will become extinct.Fortunately for seasoned travelers, thatshouldn't be the case, according toBankrate.com. Filing for Chapter 11 bankruptcydoesn't mean the demise of an airline,and rewards programs generate substantialamounts of money for their respectivecompanies and for the third partiesinvolved, such as credit card issuers.For example, even after filing for Chapter11 in 2002, United Airlines' Mileage Plusprogram is still going strong. However,smaller airlines that have gone bankrupt,such as MGM Grand Airlines and NationalAirlines, dissolved their frequent flyer programscompletely. Fortunately, most of thelarger airlines are involved in allianceswith several other carriers, so if yours doeshang up an "out of business" sign, yourmiles could be transferred to another companyin the alliance.