A local couple is out $1,300 and some Utah travel agencies may also suffer some losses in the aftermath of Eastern Airlines filing for Chapter 11 in bankruptcy court.
While many local travel agencies foresaw potential problems with Eastern weeks ago and avoided booking with the airline, some didn't, and they and their clients are paying the price.One local couple purchased $1,300 in tickets to South America a few months ago. Because the flight would originate in South America, the tickets won't be honored by another airline.
"They will have to file for a refund through bankruptcy court," said Libby Hansen, an agent with Thomas Travel in Salt Lake.
She declined to identify the couple but said the agency is telling some of its clients who bought Eastern tickets in advance to make copies of their documents and contact Eastern on how to file for a refund through bankruptcy court.
"But, based on past experience, it could take up to three years," she said.
Eastern filed for Chapter 11 protection with the federal bankruptcy court in New York on Thursday in the wake of a machinists strike that virtually shut down the Miami-based airline.
In Utah, Eastern's two flights from Salt Lake International have been canceled and about 600 employees at its regional reservation center were placed on indefinite "non-work status."
But travelers and employees aren't the only ones affected. Travel agencies may also suffer losses from placing deposits for tour groups flying on Eastern or for clients who have yet to pay.
"Agencies can get hurt too," Hansen said. "Fortunately, we haven't been hit hard."
A representative for Murdock Travel said it has been in contact with Eastern about deposits it has put down. "They told us it could be exchanged on flights that Eastern will continue," he said.
Exposure from unpaid tickets is also being tallied for a possible bankruptcy filing.
The Murdock executive said he has been through this before. "We are still trying to get money out of Frontier when it shut down" in 1986. "We will get paid; it will just take some time."
Utah's largest agency, Morris Travel/Ask Mr. Foster, says it has avoided losses by alerting agents two months ago to a potential problem with Eastern.
"We had a couple of clients with Eastern tickets, but we were able to get other carriers to honor them," an agency spokeswoman said.
Not all airlines, however, are accepting Eastern tickets straight across.
Delta Air Lines, which controls 70 percent of the commercial air traffic in Salt Lake and is a major competitor of Eastern in the Miami and Atlanta sectors, said it will accept only full-fare tickets on a confirmed basis without any endorsement.
Under that procedure, instituted Wednesday, Delta also will accept discount tickets for exchange at a ticket value determined by the type of fare and restrictions.
"If you purchased a ticket for $100 with a $25 penalty for exchange, then that ticket would be worth $75," said Jackie Pate, Delta spokeswoman in Atlanta.
United Airlines spokesman Joe Hopkins said his airline is no longer accepting Eastern tickets except when United is the designated carrier.
"We've changed our policy," he said. "Obviously, in a bankruptcy situation, we're under no obligation to accept tickets of a carrier that's bankrupt."
He said United, in an effort to help stranded Eastern passengers away from home, Thursday began offering them a special half-price standby air fare. The special fare will be available through March 15.
American Airlines said its policy of honoring certain Eastern tickets will remain unchanged. During the strike, American was accepting only Eastern's full-fare first-class and coach tickets.
American spokeswoman Mary O'Neill said the airline is willing to assume any burden resulting from honoring such tickets of an airline in bankruptcy court.