Jordan Goodman is the author of Everyone's Money Book, available at 888-201-6300. This is the third edition of the book. You can also visit his Web site at www.moneyanswers.com. He talks with us on Thursday mornings.

December 12, 2002

"Year-End Air Travel After the United Bankruptcy"

1. Is United going to be there to honor my ticket this season? Yes, they will, but you have to be careful the further out you book. United is going to do a complete overhaul of its route structure, so they may be flying a route now that they will drop in the next few months, or at least reduce the number of flights on a particular route. If that happens, you can imagine that competing airlines will jack up their fares to whatever they feel they can get away with under less competitive pressure.

If United does drop a route that you have a ticket on, you should be able to use the ticket on another carrier. Under the Aviation and Security Transportation Act that became law a year ago, carriers operating on the same routes as bankrupt carriers are required to carry passengers whose fights have been discontinued or interrupted, as long as they have room on their planes.

2. Will I lose my United Frequent Flier miles? No, United will honor all Mileage Plus miles, but they may limit the number of seats they release for frequent fliers, so free trips may become harder to get. This is also true because United will be cutting routes, meaning there will be even fewer flights to use the miles on. On the other hand, United might sweeten the pot by giving you more frequent flier miles if you fly with them. If you can, this would be a good time to use your United miles, just in case they don’t survive. If you are really worried about losing your accumulated miles, you can get an insurance policy from AwardGuard at www.awardguard.com for $119 a year that will preserve the value of your miles if your airline liquidates.

3. What is going to happen to customer service? I think it is going to get worse, as anxious United employees wondering if they are about to get fired operate under even more stress than usual. United pilots, flight attendants and machinists have all taken huge pay cuts, and the value of their stock has been wiped out, so they are not feeling too jolly this holiday season. I don’t think they will skimp on safety, though -- because an accident due to bad maintenance would sink the airline for good and surely wipe out all their jobs.

4. What is going to happen to airline fares? In some cases, United might lower fares sharply to grab market share on routes it wants to concentrate on, setting off fare wars. On routes that United drops, fares could soar sharply if there is little or no competition. Use the top Web sites like Expedia, Travelocity, Hotwire and Priceline to search for the best fares, which are constantly changing.

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