Bankruptcies affect local air travelers

April 23, 2008 7:21:30 PM PDT
Summer travel season is ramping up but so is concern about the recent spate of airline bankruptcies. A lot of Bay Area travelers lost out when Aloha and ATA suddenly stopped flying to Hawaii.

It seems like there's more downs than ups when it comes to flying these days. Several Bay Area consumers thought they were protected with travel insurance or through their credit cards, then found out it can still be difficult to get a refund if an airline goes under.

That's when 7 On Your Side stepped in to help.

Ron and Nancy Whitman of Benicia couldn't wait to get back to Hawaii.

"Kauai is so beautiful, the flowers and the gardens,'' said Ron Whitman from Benicia.

Last fall they used the reward points on Nancy's credit card to book a flight for next month -- on Aloha Airlines.

"The gardens, called Nai Aina Kai that are just breathtaking with all their colors," said Nancy Whitman.

But of course, Aloha isn't going anywhere these days. Neither is the Hawaiian carrier ATA.

Out of the blue, both of them shut down, stranding hundreds of people in Hawaii and hundreds more in the Bay area.

"The reservations were paid for and we're sitting here with no tickets," said Ron Whitman.

At first, Nancy thought she could use her reward points on a different airline. But no way; her bank said those points were gone.

"They'd purchased the tickets that they were out the money," said Nancy Whitman.

And the bank would not give her points back.

A few miles away, Steve and Pat Yasuda were fuming too.

"You're looking at $1,300, $1,400 you know, down the toilet," said Steve Yasuda from Vallejo.

They were supposed to fly Aloha in July and when the airline went bankrupt, they thought they were covered by their travel insurance.

Boy, were they surprised.

"It's flight protection in case something happens. They said well you're not covered for that," said Yasuda.

It turned out, the policy they bought from Expedia.com covers losses from injury, sickness, death -- even being hijacked, but not airline bankruptcy.

"We were a little shocked when were told, you're not covered," said Yasuda.

Their Chase credit card would not refund the airfare either, because Expedia had booked their trip and it could challenge the refund.

"It sounded like we were going to lose everything," said Yasuda. "If the travel is so bad and you can't depend on anybody, I'll just let it go," he added.

"We got so frustrated we contacted 7 On Your Side, seven on our side now," said Pat Yasuda.

Nancy and Ron contacted us too.

7 On Your Side called Nancy's bank, Simmons First National of Arkansas. The bank had already paid for Nancy's tickets, but the bank agreed to seek reimbursement and it restored all of Nancy's reward points.

As for the Yasudas, 7 On Your side contacted Expedia and the company said it would not dispute the refund. Chase credited the couple for the full air fare.

Travel attorney Al Anolik said these cases reflect turbulent times for airline customers.

"We've had more bankruptcies all in a row, and we're going to have more as the summer travel comes on," said travel attorney Al Anolik.

He says consumers should get travel insurance that does cover bankruptcies.

"There were so many of them who talked to us who thought they were insured and they didn't realize they had to get hijacked or had to get run over for it to kick into effect," said Anolik.

And once you go, make sure to have fun.

"Get some sun, try some food, maybe go to a luau and then sit on the beach," said Steve Yasuda.

"You can't beat all that you know, and the Mai Tais are still great," said Ron Whitman.

Before you choose an airline you may want to consult a good travel agent.

Sometimes they are privy to industry information about what airlines are having financial troubles that could lead to being grounded.


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