Plan to travel this summer but feel a little skittish about buying airline tickets? You are not alone. Americans are expected to take 275.4-million leisure trips this summer, an increase of 2.5 percent from last summer. But as of late May, more than 40 percent of those planning to travel had not made definite plans.
Air travel is expected to increase this summer by 1 percent, according to the Travel Industry Association of America, the industry's main umbrella organization.
Among the things holding people back are uncertainty about the economy and the specter of airline bankruptcy. United Airlines filed for Chapter 11 in December, and American Airlines flirted with bankruptcy recently. The renewed fear of terrorism won't make plans come together any sooner. (The country was at an orange, or high risk, alert in late May. That has since been lowered to yellow, or elevated risk.)
Travelers fear losing money spent on airline tickets if they want to change plans or if they should miss a trip.
Though the airline industry has had notable failures (Braniff, Vanguard Airlines, Pan Am), bankruptcies are not something a traveler should fear. David Stempler, president of the Air Travelers Association, says that smaller airlines such as struggling Midwest present more of a risk, but the larger ones, such as American, present few problems.
That's because airline bankruptcy usually is under Chapter 11, which means a reorganization of the company, Stempler says, as opposed to Chapter 7 bankruptcy, in which assets are liquidated. Reorganization for a small airline may include dropping cities.
What's a traveler to do? Whenever possible, opt to fly with a large, established carrier. Use your credit card to purchase tickets. Credit card companies will go to bat for you and are required to refund your money if an airline goes out of business before you can use the ticket.
Have any frequent-flier miles? Can they be used on other carriers? If not, consider cashing them in for merchandise, flight tickets or upgrades. Reorganization may include changing an airline's frequent-flier reward program or eliminating it.
Carriers are required by federal law to honor electronic and paper tickets issued by defunct airlines on a space-available basis and for a small fee, Stempler says. This offers some protection for passengers who opt to pay what is now an additional fee to have a paper ticket rather than an electronic reservation.
In many cases, e-tickets are not as easy to exchange as paper tickets. Also, any substitute route offered by other carriers is not guaranteed to be the same as your initial itinerary. Further, the phrase "space available" may translate into a delayed departure in a middle seat on a packed flight.
Do not sit on tickets you hold from a bankrupt airline. Reticketing must be done within 60 days of the airline's closing. Reticketing on another airline precludes getting your money back from the credit card company on the original purchase.
Another safeguard is travel insurance. Look for a policy that covers "supplier default," which means airline bankruptcy. Read the fine print.
Insurers such as Travelex Insurance Services (toll-free 1-888-457-4602, www.travelex-insurance.com) offer coverage with some restrictions, such as purchase must be within 14 days of your initial travel deposit.