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Independence Air Done by Jan. 5

Posted By Jim On 01/02/2006 @ 2:28 pm In Personal Finance | Comments Disabled

For those of us who haven’t really been around for an airline going out of business, this may a taste of what will happen if things don’t go well for the other carriers. Independence Air, a budget airline that’s bankrupt, will officially stop flying on Jan. 5th after Flight 1777 flies from White Plains, NY to Washington Dulles completes its route. If you have a ticket, listen up:

  • If your departure and return flights are after Jan. 5th, you should be able to get a full refund.
  • If your departure is before Jan. 5th and the return is after Jan. 5th, you can change your return flight to before Jan. 5th at no cost, otherwise you forfeit the return flight.
  • If you have free tickets or vouchers, they’re worthless.

What does this all mean for other bankrupt carriers?



Historically, there haven’t been this many distressed airlines so when one fell, another was eager to swoop in and show some goodwill, accepting the defunct airline’s tickets. But with the airline business so fragile and so many airlines operating under bankruptcy protection, this is very unlikely. I believe the chances of one airline picking up the discards of a failing airline at slim to none.

Frequent Flyer/Reward Programs:
You should have faith in the frequent flyer miles of the budget airlines not currently in bankruptcy protection (such as AirTran and Southwest Airlines) but you shouldn’t put much stock in the frequent flyer miles of the struggling airline behemoths (such as Northwest and Delta). Some have turned to selling their miles on Ebay or converting them into freebies via the various available programs.

Flying/Buying Tickets
If you’re buying a ticket, your money is pretty safe. Flying on a bankrupt airline is no different than flying on a non-bankrupt carrier because the safety regulations are the same. You won’t get filet mignon on your NY-LA segment but you’ll make it. As FlyI has shown, chances are an airline company will refund your money unless you’re in the unlucky spot of having the carrier go belly up while you’re on vacation.


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