The amendment has the strong backing of groups representing consumers, including the Business Travel Coalition of Radnor and the Association of Retail Travel Agents. The airlines are divided on the issue, with US Airways supporting it, Southwest Airlines declaring itself neutral, and other big carriers opposed.
Besides US Airways, which filed for Chapter 11 bankruptcy protection Sept. 12, United Airlines' parent company, UAL Corp., has been operating in bankruptcy for almost two years. Delta Air Lines Inc. has said it could be forced into bankruptcy reorganization by the end of October if it cannot restructure some of its debt, and a smaller carrier, ATA Airlines Inc., has said it may need to resort to Chapter 11 by January.
Delta, United and US Airways account for almost half of the U.S. airline industry's passenger capacity.
The original legislation was one provision of a bill, the Aviation and Transportation Security Act, that helped airlines recover from the Sept. 11, 2001, attacks. It passed at a time Congress was worried that multiple airlines could fail, leaving millions of travelers stranded.
Under the original legislation, passengers who found themselves with worthless tickets on a defunct airline have up to 60 days to make arrangements to use them on another airline, but only on a space-available basis. The surviving airline could charge a service fee of no more than $50 per round trip.
US Airways has said that it could be out of business by mid-February unless it quickly reduces its labor costs, an effort that it is pursuing in a hearing scheduled for today in U.S. Bankruptcy Court in Alexandria, Va.
Travelers who buy tickets with credit cards usually can get refunds if an airline goes out of business, but those who buy using cash or bank debit cards or who have frequent-flier tickets do not have the same protection, said Kevin P. Mitchell, chairman of the Business Travel Coalition.
"Airline failures should not be financed on passengers' backs as they are left holding millions of dollars in potentially worthless tickets," he said. "It makes little sense to provide so much taxpayer-funded protection for airlines and nothing for those taxpaying consumers of air transportation services."
Contact staff writer Tom Belden at 215-854-2454 or tbelden@phillynews.com.
