Delta has been in financial trouble for quite some time. The possible bankruptcy is getting closer due to the imminent decision of the pilots and their contract vote.
The last bankruptcy of a MAJOR airline was Eastern, many years ago, and I cannot recall what happened to purchased tickets.
Is there someone on the board who can give some input on what will happen to tickets already purchased, or soon to be purchased, based on past experiences? A Delta pilot, for example, or a friend of a pilot might be the knowledgeable source. I presume that the question of mileage awards would be an insignificant loss compared to the cost of tickets to overseas countries.

Gosh Neville...I had no idea. Our tickets (with upgrade) for Nice in November were purchased ages ago. I hope we not out $$$$!

Anyone have knowledge in this area?

Where's Marc when we need him? (New York, I think!) I think he flies Delta every week.

Nevile: editing to add that you might go to flyertalk to see if there's any buzz on this.

Doesn't Marc WORK for Delta?

I think that with the last bankruptcy other airlines picked up the tickets and no consumer was hurt BUT I am NOT an expert on these matters that is just what I think I remember.

Marc and Peter are our two resident experts.

Personally I may live in a tree but I really dont think this is going to happen. Delta is VERY big and this would cause major problems in the American airlines industry. Somehow it will get worked out.

I checked at Flyertalk and didn't see any uproar on the Delta forum. It's scary to think about, because our flights in November are on Delta and I got a heck of a deal on First Class between ATL and LAX.

I'm trying to remember the Eastern thing; I know I was reading travel boards on AOL, and people who were planning to be in the Caribbean and were flying Eastern, were talking about buying back-up (refundable) tickets on other carriers. But the problem there was Eastern's near-monopoly between the islands.

Hi, Nevil!

I think the answer lies in the legal background we both share, under the heading of bankruptcy law. If Delta were to go under Chapt. 11 of the Bankruptcy Code, the consumers' remedy would be whatever were spelled out in the court approved reorganization plan --- provided that it must be more advantageous to the consumer than what is provided under Chapt. 7. Chapt 7 (liquidation) provides the minimal allowed relief for consumers who have paid for goods and/or services from the debtor, but have not received them. In this case the consumer has a super-priority claim (even higher than the IRS or secured creditors) up to a certain amount. Now, as I have been retired for several years, I just wish I could recall that amount!! I think it was $2500, but has now been raised to $5000. But check out this amount under Chapt 7. If your ticket is less than the amount, you will eventually get all your money back. If your ticket is more, you will at least get the amount specified in the Code.

Not a very simple answer. Sorry. The law never is simple.

Thanks
Richard

If Delta enters bankruptcy I don't think ticket holders have much to worry about. USAir went bankrupt a few years ago and the impact on ticket holders was nonexistent-to-rare. United Airlines entered bankruptcy a year or two ago (I think they’re actually still operating under bankruptcy) and again their financial problems didn’t impact ticket holders. This isn’t to say that if Delta goes bankrupt that ticket holders won’t be impacted; but I think it’s a long shot.

CO went into bankruptcy twice, the last time I think in 1993. America West has been there, too.

United went in Dec 2002.

If it is Chapter 11, you have nothing to fear. They will continue just as they are.

Remember, Ch 11 is Reorganization. A breathing space, if you will, that lets the airline renegotiate certain contracts. For example, leases on aircraft, contracts for hotels for crew, catering, and airport leases.

They will then go to the employees for "give backs." If they cannot get the crew/employees to give back enough, they can then go to court and ask the court to nullify the existing labor contracts.

They then have something like 60 days to negotiate with the labor groups. Then the newly-proposed contracts are voted on. If they are rejected, basically the labor group is on strike.
This is different than Eastern. The law was changed after that.

The first thing they will do in Ch. 11, if they follow past treands, is go to court and ask the judge to allow them to continue certain contracts, such as the discounts they give the big corporations who have signed agreements with them, as well as the frequent flyer programs.

Congress passed a law a few years ago that says if an airline declares Ch 7 ( two have done that in the past five years ), then the remaining carriers have to take their tickets on a stand-by basis, with no charge over $25 to do it. The airlines are only obligated to provide service to like airports. For example, Atlanta to San Francisco, UA and AA could accept, even if it is with a change of planes along the way. But you cannot take the ATL-SFO ticket and try to use it from Charlotte, or to San Diego.

The airlines can put in special fares for up to 30 days ( maybe 60, I don't remember ), and charge you extra for a confirmed seat. You have to prove you have a ticket on the defunct airline, purchased at least the day before they ceased flying.

I think this just applies to ARC carriers, not Southwest or Jet Blue, as they aren't ARC and don't cooperate with other airlines.

My personal opinion ( I'm between jobs at United ) is that Delta isn't going anywhere. Ch 11 is a possibility, but I just don't see Ch 7 in their future.

Don't count on bankruptcy court to give you your money back in Ch 7. If they liquidate, there won't be enough to go around to all ticket holders.

And your credit card will only refund you within 60 days of purchase.

In addition to Eastern, wasn't Braniff also unable to come out of bankruptcy?

Don't worry about Delta. The US government will not allow any of the major airlines to dissolve. Personally, 2 of the airlines should be liquidated due to excess capacity, but we'll never see free markets in the airline industry - just taxpayer subsidies and oligopolistic pricing.

Hello - We were in Amsterdam and just got back. Yes there are rumors of Delta Filing Chapter 11 - mostly related to the Pilot contract issue. If you have any tickets on Delta, rest assured that you will be fine - I don't think there is any probability of Delta closing up business totally in the next few years (we have close to 1,000,000 miles with them). Airlines tend to go in and out of bankruptcy for a while before shutting down totally if then. United is either in or just came out of bankruptcy.

USAirways is about to go back in. Now, this is one airline you may want to have some concern about. Do not buy tickets for after this fall or so right now. Having said that, I recently cashed in virtually all my miles with them for award travel next February in First Class on Lufthansa.

I would not worry about any airline entering Chapter 11. Even Chapter 7 is not the end of the world since often times other airlines will honor your existing tickets. Frequent Flyer miles are likely to be taken over by another airline (eg Delta took over Pan Am's miles, Continental took over Eastern, American took over TWA's).

Thanks for the heads up re: USAirway, peter, as it has a monopoly here unless I want to drive 3 hours to Baltimore, DC or Philadelphia. I am holding tickets for MINT (Nov 12) with them, upgraded with miles, but I won't reserve further out until things shake out.

Peter:

Thanks for your reply. I'm relieved to hear observations from someone with many "miles" of experience!

Bob/Frances and Peter are right. Chapter 11 is nothing to fear. Many airlines have been there many times. I may be wrong but I think Delta (and maybe American) is the only major never to use Chapter 11.

I agree about USAir. They came out of bankruptcy in worse shape than they went in. I was all ready to make the switch to USAir and then balked because of their condition.

Our docs arrived Friday for Delta departure June 15 to Istanbul, rtn, July 3 from Venice. (Diamond 6/21-28)Too excited picking excursions to worry. I leave that to you all.
Fingers crossed, Babs

Olivia - I'd probably feel comfortable to book 2-3 months out at any point in time especially on relatively inexpensive domestic tickets. I wouldn't go booking Envoy (Business class) tickets to Europe next summer right now though. (My award ticket on Lufthansa if purchased is something like 15,000 Euros). I think the most likely scenario of what's going to happen is that USAirways becomes part of United (what they wanted prior to 9/11 anyways). I think most will agree that USAirways will not survive in the form that its in now.

Peter, I am on an upgraded USAirways next week for the VJ7 cruise, and don't have another scheduled until November 2004 (MINT) upgraded with points. My next cruises are not scheduled until June 2005 and November 2005. I think I will just wait, like you said. No need to transfer my points from Amex if they can't be retrieved.

So, you think if they are going out of business, they will now merge or whatever with United?

Olivia - that's the most likely scenario in my opinion - some sort of a merger/takeover with United - although it would be kind of the wounded leading the wounded. Rumor also has Delta taking them over but I think there would be anti-trust objections since there is a lot of overlap in route concentrations.

So what then happens to little airports like mine, SBY, do we get swallowed up by United? We used to be Piedmont before USAirways came our way. It is really nice not to travel 3 hours to get a plane.

Olivia - Now YOU made me look-up your airport (Salisbury-Ocean City MD) :) I would think that your airport would probably still be served by whoever takes over USAirways. How many flights a day do they have and how full are they usually?

My concerns re; Delta are alleviated thanks to the great talent that we have on this board. Nothing can equal experience especially when it is given so quickly and concise.
Thank you all, very much indeed.

Sorry for the slight hijack: Peter, have you tried using OAG's online service? What do you think of it? I was thinking of subscribing to that rather than continuing to use the hardcopy.

Lawrence - I had a short subscription to OAG's hardcopy years ago and never have tried their online service. As far as I'm concerned, you can see and find out more information online without having to pay for it. For example, the site I use a lot is www.itn.net - if you signup for an account, free, and turn on the "expert" mode, you can see all availability across airlines down to the fare basis. Since you travel quite a bit, you have a pretty good idea of what routings there are anyways. Most airlines now have timetables that can be downloaded onto a PDA anyways. With all this, I'm hard pressed to come up with a reason to pay for OAG, especially since I'm only a leisure traveler so it would be out of my own pocket.

Wasn't there talk a few years ago about American and Delta merging?

Marcie - I don't recall the American and Delta merger but that would never happen at this point since Delta, Northwest, and Continental are very closely tied now like USAirways and United.

Peter, finally I put an airport out there that you didn't know about! ;) It is very small, with about 8 flights per day to PHL, and maybe 1 to DCA and one to BWI (now one to Charlotte since SWest is coming to PHL). For the few times that I fly now (not for biz anymore) I would say that they are usually at least 75% full, but they only hold 36 pax. When they oversell a full flight by 2 or 3, you are usually not going to get on standby since other pax have no alternatives.

Olivia - I would say that you would probably still have service then no matter who takes over USAirways since there's enough demand there, maybe you'd lose one flight a day and/or where you fly to may change. If it's United, maybe some or all of the PHL flights would be shifted to IAD. It's not like you have one flight a day that's only 50% full, that would be a candidate for no more service.