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American Airlines and its parent company have filed for Chapter 11 bankruptcy protection. (Richard W. Rodriguez/AP)
American Airlines and its parent company have filed for Chapter 11 bankruptcy protection. (Richard W. Rodriguez/AP)

Holiday flights on bankrupt American Airlines should be safe Add to ...

American Airlines passengers should not expect any near-term changes after the airline filed for bankruptcy, but the filing may affect their future plans.

Holiday flights should take off as scheduled, and the carrier said it will honour existing reservations and reward miles.

“I think everything's cool,” said Tom Parsons, head of deals website Bestfares.

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But the Chapter 11 reorganization of American Airlines and its parent company AMR Corp. could lead to a shakeup in prices, fewer flights and an altered flying experience.

“I have almost 300,000 miles with American, and there's no sweat on my brow,” said Mr. Parsons. Airlines tend to protect their mileage programs throughout bankruptcy, he said, because they make money selling miles to credit-card issuers, and even passengers trading in miles fill seats and spend money.

American sent a letter on Tuesday to its frequent fliers assuring them their miles were safe.

But Morningstar airline analyst Basili Alukos said that when the company comes out of bankruptcy the miles could be more difficult to redeem.

American said it would operate its regular schedule and honour tickets and reservations but it could reduce its number of flights. It may also cut prices.

“As always we will remain competitive with fares in the marketplace,” said Tim Smith, an American spokesman.

But the longer-term impact of an airline bankruptcy is higher ticket prices. As American uses this reorganization to get rid of many big, pricey, old planes, it may cut their routes.





Federal U.S. safety inspectors have stepped up their surveillance of American Airlines and American Eagle, which is also owned by AMR, according to the Federal Aviation Administration.

“The FAA acts swiftly to aggressively protect the safety of the travelling public any time an airline files for bankruptcy protection,” said a spokesperson for the agency. But that's a typical precaution, and there's no reason to believe that the bankruptcy filing would lead to safety problems.

As the company gives up its older planes, passengers can expect to see more bells and whistles on the new ones, said Mr. Parsons. “In five years, they'll have one of the youngest fleets in the country,” he said.







Reuters

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