There’s so much confusion and misinformation about airline bankruptcies.

Here’s a quick explainer about what an airline bankruptcy would mean for your booked flights.
First off, *very* important to distinguish between bankruptcy and going out of business. Not the same.

An airline declares bankruptcy when they can’t pay their bills. But rather than dying, a bankruptcy court allows an airline to renegotiate debts and contracts. They live on.
This isn’t theoretical. Delta, United, American have all gone through bankruptcy in the past two decades. None closed up shop.
Let’s say you’re looking at an American Airlines flight. Should you hold off booking it because you’re worried they might go bankrupt and you’d lose your shirt?

Answer: no.

In the short-run, travelers see little impact if AA declared bankruptcy.
How do we know? Because AA has gone through this before. When they declared bankruptcy in 2011, here’s what they said:

https://www.aa.com/i18n/information/restructuring.jsp?anchorLocation=DirectURL&title=restructuring
Should we expect similar in any future bankruptcy? Yes.

Airlines make money flying planes. And maintaining loyal customers is critical for an airline’s future.

Canceling everyone’s existing reservation is a precursor for going out of business, not emerging from bankruptcy.
Medium-term, an airline bankruptcy isn’t great for travelers because it usually means fewer flights (and thus higher fares).

But in the short term, you’re unlikely to see an impact on an existing flight reservation.
Could a major US airline actually collapse (& thus you’d lose your shirt)? Highly unlikely.

If an airline nears collapse, they’re likely to get bought up for their valuable assets (planes, operating certs). This has happened in the past and existing tickets/miles were honored.
(Important to note that most of the preceding concerns US airlines, which under American law have the ability to declare bankruptcy. Not all foreign airlines can do that, though many can like Virgin Australia is currently doing.)
Final point: the likelihood of any major US airline declaring bankruptcy in 2020 is quite low.

2021? ¯\\_(ツ)_/¯ Depends on the length/severity of the pandemic.
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