American Airlines’ parent filed for Chapter 11 bankruptcy protection this morning.
In the past decade, United, Delta, and US Airways have all been in and exited from bankruptcy protection.
American will certainly continue to operate through its reorganization, which is designed to shed costs that competitor airlines have already offloaded. While there will be some operational changes no doubt, frequent flyers need not worry.
As I explained last month, an American Airlines bankruptcy is not bad for frequent flyers.
I have nearly a million American Airlines miles myself, and lifetime Platinum status with the airline. And I’m not worried about my stash of miles. American Airlines will continue to fly, liquidation is not foreseeable.
Bankruptcy may even be a boon to American’s mileage program. It’s been quite some time since American Airlines restructured their frequent flyer award redemption chart, while other carriers have adjusted their award pricing upwards. A bankruptcy could well put off any award chart inflation, not wanting to anger or spook customers during the process, and lead the carrier to attempt to leverage the program during bankruptcy through lucrative bonus offers and promotions, much to the benefit of members (although likely leading to greater award chart inflation after American exits bankruptcy).
Update: I’m quoted by the Associated Press this morning:
“Miles are safe,” said Gary Leff, co-founder of frequent flier site MilePoint. He said the bankruptcies of past airlines “are instructive.” He even suggested there might be some promotions to keep loyal travelers.