Although things have been starting to pick back up in travel, it’s no secret that the airline industry has been hard hit by the coronavirus pandemic. The International Air Transport Association is saying that global losses could reach billions of dollars, and last month, the aviation consultancy CAPA predicted that “most airlines in the world will be bankrupt” without help. There has even been talk of American Airlines’ demise.
What’s shocking is to witness just how many airlines have folded or filed for bankruptcy during the coronavirus pandemic. And even for airlines that are still in business, it’s not great: A recent study says that US carriers have given out $10 billion in vouchers due to the pandemic.
Here, we take a look at some of the biggest coronavirus-related airline casualties around the world. We also provide some helpful tips about what happens to your tickets and your travel miles if your airline goes into bankruptcy or goes belly up.
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Airline Casualties Due to Coronavirus
LATAM: So far, the largest airline to crash because of coronavirus is Chile’s LATAM, which filed for U.S. bankruptcy protection in May due to the pandemic. LATAM says it will continue flying as it restructures its debts in bankruptcy court.
Avianca Holdings: The second-largest carrier in South America, Avianca survived the Great Depression—but not coronavirus. The airline filed for Chapter 11 bankruptcy protection in May. Like LATAM, Avianca will continue flying during the restructuring.
Virgin Australia: After almost 20 years of operation, Virgin Australia—the country’s second-biggest airline—filed for voluntary administration, the equivalent of bankruptcy restructuring. It’s the largest airline to collapse in Australian history. The private equity group Bain Capital recently agreed to buy the airline for an undisclosed sum; it’s future remains unknown.
Flybe: The British regional airline Flybe was struggling before coronavirus and even the UK government and Virgin Atlantic tried to save it. But no luck—the airline entered voluntary administration, similar to bankruptcy, in March. Staffers lost their jobs overnight.
Miami Air International: After 29 years in service, Miami Air International filed for Chapter 11, then proceeded to cease operations. While small, the charter airline had a fleet of Boeing 737s and operated worldwide passenger flights for cruise operators, professional sports teams, the US military and more.
RavnAir: Alaska’s largest regional air carrier filed for bankruptcy in April and is about to go up for auction. The airline previously serviced 115 rural communities, flying passengers, freight and mail around the state.
Trans States Airlines: St. Louis-based Trans States Airlines, which flew regional routes for United Express, ceased operations in April. The airline had originally planned to keep flying until the end of 2020, but due to coronavirus, business stopped sooner.
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Compass Airlines: Regional carrier Compass Airlines, which provides service for American Eagle and Delta Connection, also shut down in April.
Air Deccan: In April, Air Deccan—a regional airline that used to be India’s largest low-cost carrier—ceased operations due to the pandemic.
BRA: At the beginning of April, Swedish airline BRA applied for court-administered reorganization to protect the airline from bankruptcy. BRA discontinued all flights but might start back up after the summer.
South African Airways: Meanwhile, things haven’t been great in South Africa, either: South African Airways’ future has been in the lurch with talk of the government shutting it down and starting a new national airline.
SunExpress Deutschland: A Turkish airline jointly owned by Lufthansa and Turkish Airlines, SunExpress Deutschland flies to popular Turkish vacation spots—but not for long. Flight operations will be discontinued shortly and the airline will go into liquidation.
Level Europe: The latest airline casualty of the coronavirus is Austria-based budget airline Level Europe, which recently announced plans to file for insolvency.
Passenger Advice: What Does All This Mean for You?
So what does all this mean for consumers, especially when it comes to your miles and refunds? Here’s what you need to know:
Refunds: Unfortunately, there’s no guarantee that an airline going into bankruptcy will reimburse passengers for their outstanding tickets, since investors would be paid back first. Granted, in the US the FAA requires airlines to have insurance, but a payout could take a while—if it happens at all.
Vouchers: Many airlines have given out vouchers or credits instead of refunds due to coronavirus cancellations. Bad news—since these vouchers don’t have any cash value, you’re probably out of luck.
Frequent Flyer Miles: Typically, if an airline goes out of business, so does its loyalty program, since miles are not considered to have cash value and can be devalued or eliminated at any time. In the case of a bankruptcy, there might be some hope for hanging onto your miles if the airline merges with another airline. Just don’t count on it.
Smart Travel Tips: What Can You Do?
Credit Card Protection: One avenue to explore: Go to your credit card company and request a refund or charge back. And be aware that timing is critical. According to the Fair Credit Billing Act, consumers only have 90 days after they make a purchase to file a claim.
Travel Insurance Protection: If an airline liquidates, travel insurance might help. But be sure to check the fine print, as it’s not a guarantee.
Miles: If your airline is in trouble, you might want to quickly book a flight with your miles and use it; at the very least, the ticket will have cash value versus the miles, which will have no value. Or use your miles in other ways, like to go shopping. If your airline is teetering on the verge of bankruptcy or has gone under, keep records of your miles. You can see if another airline will do a status match to attract your business and your loyalty.
Think Ahead: Here’s a hack to consider if have have a voucher and are worried about your airline’s well-being: Book a trip using the voucher and take out a travel insurance policy that covers bankruptcy. You might have a better chance of getting a refund.
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