TWA IN BANKRUPTCY : Q&A; : What This Means for Passengers

Although expected, the bankruptcy filing by Trans World Airlines on Friday raises a number of concerns. Here are some answers to basic questions asked by consumers:

Q: Are my airline tickets still good?

A: Yes. TWA said it has no plans to change its flight schedule. Besides prepaid tickets, it is continuing to accept travel certificates and free tickets issued as frequent-flier awards.

Q: Should I continue to fly TWA?

A: That’s a difficult question. TWA expects to continue operating normally as it reorganizes its finances under the protection of the bankruptcy court. Whether TWA can do so isn’t certain.

Frequent Flyer magazine Editor Joe Brancatelli said he believes that TWA can emerge successfully from bankruptcy. “They said things will be fine, and I have no reason to disbelieve them,” he said.

But Chris Witkowski of the Washington-based Aviation Consumer Action Project suggests that consumers purchase TWA tickets with credit cards. That way they can receive refunds for unused tickets from their credit card issuer if TWA’s forecast turns out to be incorrect, and the airline stops flying. Usually when a carrier shuts down, people who purchased unused tickets with cash receive nothing.

Anyone wishing to avoid TWA can do so, travel agents said, because the airline serves no destination exclusively. However, it may cost more. In an effort to build traffic, TWA has underpriced competitors for business and first-class travel between New York and Los Angeles and in many European markets.

Q: Are my flight coupons still valid?

A: Last fall, TWA sold “BusinessSaver” coupons good for discounts on unrestricted round-trip fares. Travelers presenting two $50 coupons are guaranteed a $400 round-trip fare anywhere in the United States. The program ends in April.

When it announced the program, TWA said that it was depositing receipts from sales of the coupons in an escrow account. TWA spokesman Don Fleming said Friday that the coupons would not be affected by the bankruptcy.

Q: Are my frequent flier miles still good?

A: TWA said that its bankruptcy filing hasn’t affected its frequent flier program, and that its airline partners are still on board.

Nonetheless, Dan Smith, consumer relations officer with the Air Line Passengers of North America in Buffalo, N.Y., said that members of TWA’s program might want to consider trading frequent flier mileage points for free tickets with TWA’s stronger partners, such as Alaska Air or American Airlines. An American spokesman confirmed Friday that tickets issued by TWA for free travel on American would be honored if TWA went out of business.

If planning a free trip on TWA, Smith advises making it soon.

Q: What happens to frequent flier miles if TWA stops flying?

A: If TWA ceases operations, frequent fliers would be out of luck unless another airline took over the TWA program.

Members of TWA’s frequent flier program can elect to accumulate mileage points in American’s frequent flier program. These miles would not be affected if TWA shut down. However, consumers can’t shift TWA mileage points to American’s frequent flier program.

Before taking a trip, TWA ticket holders have to declare which program they want to assign mileage points to. Once the decision is made, mileage points can’t be shifted from one airline’s program to the other.

MAIN STORY: A1

Fasten Your Seat Belts . . .

Here’s a snapshot of the outlook for the nation’s 10 largest airlines today, ranked according to passenger traffic statistics. Airlines such as USAir, Southwest and Alaska have broken into the top 10 over last decade by expanding markets and outlasting now-defunct industry giants including Pan American World Airways, Eastern, Braniff and Western, which was acquired by Delta.

1. United Airlines: (1981 rank: 1) One of the nation’s strongest airlines despite a whopping $494-million loss from operations for 1991. Strength is in its transpacific and domestic route system, though transatlantic traffic is growing.

2. American Airlines: (1981 rank: 3) Though the slump in the industry has caused it to cut back on expansion plans, it is among the nation’s strongest carriers. Has a strong domestic system and has made inroads into Latin America and Europe by plucking pieces from now-defunct Eastern and troubled TWA.

3. Delta Air Lines: (1981 rank: 6) The recent acquisition of Pan Am’s European routes propelled it into the global travel race, but integration of Pan Am’s routes is proving costlier than expected. Acquisition of Western Airlines made it a player in the transcontinental market.

4. Northwest Airlines: (1981 rank: 7) Considered a survivor. Has pushed into new markets through linkups with weaklings America West and Hawaiian Airlines. In on-again, off-again merger talks with British Airways.

5. Continental Airlines: (1981 rank: 10) Operating under bankruptcy court protection. Has been slashing payroll and trimming routes.

6. USAir: (1981 rank: 12) Hunkered down to its East Coast base after losing a bundle on California expansion. As it lacks an international route system, it is viewed as a merger candidate in the long term.

7. Trans World Airlines (1981 rank: 5) Could emerge from bankruptcy as a healthier airline if creditors stick together, but long-term survival depends on linking up with a stronger carrier.

8. America West Airlines (1981 rank: --) Overexpansion and heavy debt drove it into bankruptcy, but the airline has said it expects to emerge from bankruptcy later this year. Its chief market is in the Southwest.

9. Southwest Airlines (1981 rank: 17) Low-cost, low-fare airline serving outlying airports is one of the industry’s success stories. Operating from its Texas base, it has made large inroads in California.

10. Alaska Airlines (1981 rank: 23) Known for good service, it’s done well in point-to-point markets in the Pacific Northwest and has made some inroads in California. Analysts expect it to continue to do well.

Source: Air Transport Assn. and company reports

1981 Leaders

The top 10 of 1981 based on traffic.

1. United Airlines

2. Pan Am

3. American Airlines

4. Eastern Airlines

5. TWA

6. Delta Air Lines

7. Northwest

8. Braniff

9. Western Airlines

10. Continental