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This Time, Frequent Fliers A Little Edgy

By Keith L. Alexander
Tuesday, September 14, 2004; Page E01

The last time US Airways filed for bankruptcy, the airline's nearly 4.5 million frequent fliers didn't rush to cash in their points. This time, some of those elite travelers are concerned and are trying to figure out how to ensure they don't lose their miles.

The reason: Chances of US Airways' survival are bleaker than they were two years ago during the first bankruptcy. If the airline folds, it may not be as easy as it was in the past for another carrier to honor travelers' frequent-flier points.

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Live, Wednesday - 11 a.m. ET: Ben Baldanza, senior vice president of marketing at US Airways, discusses the second instance of US Airways filing for bankruptcy protection with Post columnist Keith Alexander.
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While US Airways works toward a reorganization under court protection, it will continue to honor its frequent-flier miles. During the first bankruptcy, US Airways frequent fliers were able to use their points as usual for trips and upgrades. United Airlines, which also is in bankruptcy, continues to honor award requests of its frequent fliers.

Still, Karrye Y. Braxton of Washington, who has about 51,000 points, fears she will lose her miles if she doesn't burn them off by the end of the year.

"I better be quick. I guess I know what airline I'll be taking home to Los Angeles for Christmas," she said.

US Airways spokesman David Castelveter said customers were not rushing to use up their points.

In an e-mail to US Airways frequent fliers on Sunday, chief executive Bruce R. Lakefield tried to assure members that the bankruptcy filing would have no impact on their ability to earn or redeem frequent-flier miles.

"I want you to know that this announcement has no impact on your dividend miles account and the many benefits you receive as a member. While our restructuring efforts focus on achieving a competitive cost structure, there will be no direct impact on our ability to professionally serve you," Lakefield wrote.

During the first bankruptcy, US Airways frequent fliers weren't as worried as they are now because they assumed another airline, if need be, would step in and acquire US Airways and honor its miles, in the same way that American did with Trans World Airways and Delta Air Lines did with Pan Am.

But now the U.S. airline industry is in its worst shape in a generation, and few carriers can afford to take on additional financial burdens.

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