Will AAdvantage Miles Become Worthless With The American Airlines Bankruptcy? | CreditShout

Will AAdvantage Miles Become Worthless With The American Airlines Bankruptcy?

By Kevin / January 2, 2012
Will AAdvantage Miles Become Worthless With The American Airlines Bankruptcy?

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As you may have heard, American Airlines has filed for bankruptcy. This has caused a lot of uncertainty and anger among AAdvantage cardholders, many of whom have earned tens of thousands of miles only to find out these miles may become worthless.

Although there is still much uncertainty, all hope is not yet lost.

American Airlines’ Side of the Story

According to Forbes, American Airlines sent an email to it’s frequent flyer program members that their miles are safe. They are promising business as usual, so your miles should work normally if you go by what they say.

Of course, corporations tend to paint a rosy picture of their situation, so you should keep that in mind. Imagine if they came out and said that the sky is falling. Not only would their frequent flyers become jittery, but so would their stockholders. You can see where this is going.

This is not to say that American Airlines will not honor frequent flyer miles as usual. However, it is best to look deeper into this, which we will below.

History is On Your Side

This is American Airlines’ first bankruptcy filing. There is no direct precedent to determine whether or not they will honor their miles.

However, according to Forbes, every major US airline has filed for bankruptcy protection at some point in history. All of them have honored frequent flyer miles in the aftermath.

Also, consider that American Airlines has been in business since 1934. That means that they have a long record of successfully staying afloat (pardon the pun). While the economy is at one of it’s worst points in history, they are likely to survive this difficult time.

It’s In American Airlines’ Best Interest to Honor Miles

The recent bankruptcy filing is likely to cause jitters to those who have an interest in the company. Imagine how you’d feel if your friend owed you $2,000 and just filed for bankruptcy. You’d probably wonder if you were going to get paid and would hesitate to trust his financial stability.

To help offset customer jitters, American Airlines will likely do everything within their power to ensure customer loyalty.

As refusing to honor frequent flyer miles could lead to a runaway disaster of customers switching to other carriers, American Airlines will almost certainly honor their miles. After all, if customers leave, revenues will decline and add to the company’s problems, leading the stock market to react negatively and putting the future of the company in serious doubt.

What You Can Do

If you are concerned that you will lose your miles, consider using them as soon as possible. If American Airlines does collapse, you’ll have a much better chance of getting the full value of your miles if you use them sooner as opposed to later.

Consider taking that much-needed vacation within the next few months, visiting grandma out of state and use up some of those miles. At least you’ll definitely get something for them if you do so.

If you participate in other frequent flyer programs, hold off on using them until you’ve used up your American Airlines miles. Your other programs are probably on more sturdy ground and your miles are at less of a risk in such programs. Get rid of your American Airlines miles before using any others.

It’s not a good idea to panic if you have American Airlines frequent flyer miles. Chances are that American Airlines will honor them and that they’ll be around for a while.

So, just operate as usual and keep up to date on the situation. If you get too nervous about your miles and just want to get this off your mind, then use them up. Otherwise, they should be relatively safe if you just leave them as is.

The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone.Additionally, the opinions of the commenters are not necessarily the opinions of this site

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