Grounded by a bankrupt airline? Here’s what to do

Last week, three U.S. airlines announced immediate shutdowns, a fourth stopped flying as it had previously announced, and a fifth said it would shut down next month.

• Aloha Airlines, one of the two largest carriers operating within Hawaii, stopped flying after March 31.
• ATA Airlines, an Indianapolis-based major carrier, shut down on April 3.
• Skybus Airlines, a low-fare carrier based in Columbus, Ohio, ceased flight operations on April 5.
• Skyway Airlines, a commuter partner of Milwaukee-based Midwest Airlines, ceased flight operations on April 5 (as it had announced in January).
• Champion Air, a full-service charter operator based in Bloomington, Minn., announced on March 31 that it would cease flight operations on May 31.

In addition to these shutdowns, on April 10 Frontier Airlines filed for Chapter 11 bankruptcy reorganization, citing, among other industry issues, the "unprecedented cost of fuel." Although the Denver-based carrier said it intends to continue normal operations through the reorganization process, passengers should be cautious about booking Frontier. The airline's Web site offers further details.

What should you do if you have a ticket on one of these airlines (or the next one to stop flying)?

Know your rights. Visit the Service Cessations page on the U.S. Department of Transportation's Aviation Consumer Protection Division site. The DOT site has specific updates for ATA, Aloha, and Skybus. As of this writing, there is nothing yet on Skyway or Champion Air.

File a claim with your credit card company. "Customers who paid by credit card and who do not receive substitute transportation can file a claim with their credit card company," the DOT says in its Aloha update. If possible, enclose a photocopy of the ticket, itinerary, or receipt. State that your airline is in bankruptcy and has ceased operations, and that you are requesting a credit pursuant to the Fair Credit Billing Act.

File a claim with the court. The DOT says ticket holders who do not receive alternate transportation or a refund should file this claim form.

In my next blog post I’ll have more detailed information about each carrier.—William J. McGee

Comments

[Glennette I Starsiak]

I purchased 4 tickets to Maui roundtrip. 3 people made the trip to Maui on March 29, 2008. 3 of us then had to purchase tickets to fly home at a cost of $4,100. One person called two days before the flight to go to Maui because of illness so she did not go with us. She so far has lost all of her money.

I really don't think this is fair of any airlines to strand people with no way home and have to put out another $4,100 to get home.

I will never go back to Hawaii becaue of this. United Airlines pretty much took advantage of us. They flew us home at a price that was very unreasonable.

So the vacation that I waited for a year to go to turned out putting me and my travel friends into debt. It is not fair.

[arlyn]

This is not fair. If I had purchased a ticket on one of these airlines, I would request for a refund or file a claim with the court. For this airlines that expected to be closed, they must not be allowed to issue tickets to customers. Because this is unfair to travelers.