American Airlines (AA) files Chapter 11 Bankruptcy – What it means for you
This morning I was greeting in my email inbox with a message from American Airlines notifying me of their Chapter 11 bankruptcy filing. Now, I fly AA a lot and have considerable AAdvantage miles banked. What was my initial reaction?
GOOD!
You see, the other US-based legacy carriers have all already done this. It will allow them to unburden themselves of unviable union contracts that have kept them from having the money to spend on things like new and refurbished planes needed to compete with European and Asian carriers that offer far superior business class products on long haul flights – and even to refurbish domestic planes with things like WiFi and In Seat Entertainment that people have started to expect with the likes of Jet Blue offering it on every flight.
FOX wrote a piece on this filing that sums it up pretty well: http://www.foxnews.com/travel/2011/11/29/what-every-passenger-should-know-about-american-airlines-filing-for-bankruptcy/
What about your miles? They are *most likely* very safe. The AAdvantage program is what keeps high paying customers loyal to AA and even if the company were acquired, not honoring the miles would alienate the customers the buyer would covet most. In past takeovers (not that we know a takeover will happen here), miles and statuses have been safe. Like when American took over TWA a couple of decades ago and AA turned those miles into AAdvantage miles.
Sure, flying AA near term might be a bit less fun as employees will be hurt by the filing and morale will sink – but long term, this should be a positive thing for AA;s frequent (and infrequent) flyers.
