Entries in FareCompare (3)


What American Airlines’ Bankruptcy Means for You

Matthew Peyton/Getty Images(NEW YORK) -- American Airlines filed for Chapter 11 bankruptcy Tuesday, taking many investors by surprise and causing worry among American Airlines customers who fear that their miles and tickets may not be honored. Here’s a look at the answers to some of the questions American Airlines customers are asking.

Will my tickets be honored? “American Airlines’ ticket holders are safe,” according to Rick Seaney, the CEO of FareCompare, a company which specializes in helping air travelers get the best deals on flights. “It’s no problem, historically we’ve seen all the major airlines go bankrupt except American and it’s never been an issue with honoring tickets.”

What about frequent flier miles? “Your miles are safe as well,” Seaney confirms. In fact, “we may see American offering double or even triple miles” as they seek to mitigate the public relations damage associated with the bankruptcy, he said. Frequent fliers are the airline’s core customers, according to George Hamlin, an aerospace aviation consultant who has worked with TWA and Texas International, failing to honor their miles is a sure recipe for failure.

What about the workers? American Airlines has 78,250 employees and they will not do well in this bankruptcy, according to aviation analyst Darryl Jenkins. In addition to layoffs, “They are all going to face benefit cuts. This will not be fun. If you’re an American employee you will take a pretty big hit.”

Will the cutbacks effect safety? It's unlikely, says Jenkins. “Generally what you see in a Chapter 11, is FAA steps up oversight. We’ve really never seen a U.S. bankruptcy lead to safety compromises.” Seaney added, "Safety is the number-one concern of airlines…the worst thing that could happen is a safety violation.”

So what does this mean in long run? “Nothing likely for at least three to six months,” according to Jenkins. Because most of the airlines have already cut back on routes in the last few years, further cutbacks will be few and far between. However, if cutbacks do occur the 35-50 seat regional jets, which tend to be the most unprofitable, are likely to be the first to go.

Jenkins said the brunt of the bankruptcy will be borne by the stockholders, bond holders and employees. Travelers will be largely unaffected, although Seaney does advise spring break travelers to wait until after New Year's to start looking at tickets.

Copyright 2011 ABC News Radio


Holiday Airfare Increase Takes Off; American Airlines Announces Losses

Joe Raedle/Getty Images(NEW YORK) -- Bad news for holiday fliers: it looks like airfares are set to take off.

According to CEO Rick Seaney, as of noon Wednesday, Delta, United, American, US Airways, Jet Blue, Southwest and AirTran have all raised fares by $4 to $10 roundtrip.

Fare hikes in October and November are relatively rare, Seaney told ABC News in an email interview, but he says demand for air travel may be driving the increase.

“This is not very common, we have not seen domestic hike attempts in October or November since 2007 when oil prices were skyrocketing ahead of the recession in 2009,” said Seaney.

He added, “airlines tend to probe both consumers and other airlines’ appetites for higher ticket prices when they feel demand is relatively strong, demand seems to belying the daily sour economic headlines.”

Earlier this month in a blog posting on his website,, Seaney noted that airfare for travel over the Thanksgiving holiday could be up as much as 20 percent in some cases compared with last year.

Not all fare increases stick. Seaney has tracked 17 attempts by airlines to raise fares this year, but only eight were successful.

The fee increases come as airlines are releasing their quarterly earnings.   American Airlines announced Wednesday it lost $162 million in the 3rd quarter.

Seaney says the takeaway for consumers is simple: don’t wait to buy your tickets.

“There are really no holiday deals,” he says. “You are going to pay a premium -- it is all about getting a better bad deal, which means you should not procrastinate.”

Copyright 2011 ABC News Radio


Delta, United Airlines Hike Domestic Fares

Photo Courtesy - Delta Airlines(NEW YORK) -- A proprietary airfare processing system used by FareCompare detected "significant domestic airfare hike activity" Monday afternoon from both Delta and United Airlines on the majority of their respective route systems, according to the airfare shopping website. 

Delta's domestic ticket prices increased by up to $20 roundtrip, while United raised domestic prices by up to $10 roundtrip.

FareCompare CEO Rick Seaney said "usually one airline leads out on a domestic hike with others deciding to match in the following 36 hours."  Seaney said Delta or United will have to adjust their hike to be in line with one another due to the recessionary competitive rule that says an airline's price hike can never be $1 more or less than their competitor's.

This fare hike is the second in 2011 and the fourth since mid-December 2010.

Copyright 2011 ABC News Radio

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