The Civil Aeronautics Board yesterday approved an airline industry program guaranteeing air travelers that tickets written for travel on an airline that goes bankrupt will be honored by other airlines at no extra charge to the consumer.
Under the airline default protection plan, airlines that participate in a central bank clearing house for airline tickets committed themselves to honor outstanding tickets issued for travel by travel agents on a bankrupt airline for up to a year following the failure of an airline.
The industry plan, proposed by the Air Transport Association, the trade group that represents the nation's commercial airlines, goes into effect immediately on an interim basis while the board proceeds to make a final decision on the plan, probably in a few weeks.
"In essence, the airlines are guaranteeing that a ticket for transportation on any one carrier will be backed up by all the carriers," CAB Chairman Dan McKinnon said yesterday. "The American public need not alter its travel plans because of speculation about the solvency of particular airlines."
Under the plan, airlines that transport passengers who were ticketed on a defaulting carrier would be reimbursed up to 25 percent of the price of the ticket. The funds will come from a separate money pool collected from payments made by each member airline on a pro rata basis, based on total ticket sales.
An immediate beneficiary of the program should be Braniff International, whose officials had complained that widespread speculation that it was close to bankruptcy had prompted customers and travel agents to reserve flights on competing airlines. In some cases, travel agents were reported booking reservations for travelers on Braniff flights but writing the tickets on ticket stock of other airlines. That procedure exacerbated Braniff's cash-flow problem by requiring it to collect the money for the tickets from other airlines after the passengers have been carried instead of getting the money soon after the ticket is written from the clearinghouse, as is customary.
Yesterday Braniff officials reported a groundswell of support in Texas as Texas-based companies pledged to divert their air travel to the financially ailing airline, in some cases buying substantial amounts of tickets with destinations to be filled in later as needed.
In another development yesterday, the Federal Aviation Administration held a drawing to determine the priority in which airlines will be offered additional landings and takeoffs--called slots--that are being made available, beginning April 25, at the nation's 22 capacity-limited airports.
At Washington's National Airport, for instance, Trans World Airlines will be offered first crack at the additional capacity, followed by Colgan Airways, then Eastern Airlines.
In the past, the FAA has distributed slots on a first-come, first-served basis that prompted airlines to inundate the agency with constant requests.