Where do miles go when programs die?
Unlike dollars deposited in a checking account, which in most cases are insured by the FDIC, miles come and go with the airlines that operate the mileage programs. Often in the case of an airline declaring bankruptcy, the miles simply disappear because, when the carrier’s assets are sold, miles are viewed as a liability (the eventual cost of transporting a passenger for free). When it ceased operations on September 12, Midway was a partner in the programs of Continental and Northwest, but did not operate its own program. So no miles were lost. However, when the original Midway went belly-up in 1991, it did have a program and 700,000 members lost their miles. Another current bankruptcy case is Ansett, Australia’s second largest airline. While Ansett continues limited flights, the accounts of its 2.4 million Global Rewards members are frozen. On the other hand, if a faltering carrier is acquired by another airlineas happened with American’s acquisition of TWAthe frequent flyer program me
