AA and Chapter 11

AA and Chapter 11

American Airlines filed for Chapter 11 bankruptcy protection last month, which wasn’t surprising considering the airline’s financial performance over the past few years. The airline has lost over $12 billion since 2001. Despite the airline’s descent into Chapter 11, American AAdvantage members can rest assured that their miles are safe. In an email to frequent flyers, American Airlines stated, “We want to assure you that your AAdvantage miles are secure.”

Bottom line: Just because an airline goes into bankruptcy doesn’t mean that frequent flyers are in danger of losing their accrued miles. United, Delta and US Airways all reorganized under Chapter 11 bankruptcy a few years ago and members continued to be able to earn and redeem miles throughout the process. More recently, Frontier Airlines filed for Chapter 11 in 2008 and the EarlyReturns miles retained their value as well. We fully expect the American AAdvantage program to continue as before. Fortunately, the value of miles don’t fluctuate with the airline’s stock price.

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