If an airline goes bust or insolvent, what happens to frequent flyer miles and reward tickets?
- By
- Aparna Patel
- |
- 4 Aug, 2023
- |
Bankruptcy means that the company has run out of money. At that point, a list of the company’s debts is drawn up and prioritized. Money from selling off the company’s remaining assets is used to pay off those debts as far as is possible.
A ticket for future travel that you have paid for is a debt owed to you. If money is available, that will be refunded. However, mileage points are just an offer to sell a service to you in the future at a discount and they generally have no cash value. They disappear with the airline.
If the airline is a part of an alliance (as in your first question), there might be some recompense in that other alliance partners might still recognise the points. But that’s up to them and their individual terms with you in the ticket.
As far as the points themselves – you’ll likely lose them. A prime local example in Australia was Ansett, which went under in 2001, and even years later people were wringing their hands over their lost points.
Similarly to a coffee shop – many give you a rewards card where the 10th coffee is free. If they went under – no free coffee. This is just on a bigger scale.
Credit:stackoverflow.com‘
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