Don't get caught with air tickets to nowhere

With airlines under pressure, take care booking flights, writes SIMON CALDER

When Ansett collapsed it left thousands of travellers stranded. On the other side of the world, bankers for Gill Airways pulled the plug on that British carrier last Wednesday.

The travel industry is awash with rumours about other likely candidates for bankruptcy - rather disconcerting if you happen to have a flight booked.

Before I suggest how to minimise the risks of losing your money, bear in mind that bankruptcy is not always as terminal as it might sound.

When you read that Continental Airlines and America West may file for bankruptcy - and you have just read that very thing - there is no reason to stop booking flights with them. The bankruptcy they have in mind is called Chapter 11, a legal technicality that gives US companies protection from creditors while they keep flying.

Continental spent years in Chapter 11, and emerged a better and stronger airline. Some say this form of bankruptcy concentrates the minds of all the staff and they perform better.

But if you're worried that an airline could shut down completely in the manner of Pan Am a decade ago or Midway Airlines (oops, there goes another one) last week, there are a couple of ways to protect your cash.

First, about the silliest thing to do is to buy a ticket direct from an airline with cash, cheque or a debit card. Should it stop flying, you join a long list of creditors who stand precious little chance of recovering more than a fraction of their cash.

Study your travel insurance policy, but be warned that in these extraordinary days, rules change fast, as we have seen with Tower, QBE and Mike Henry. Long-haul flights costing hundreds of dollars are the biggest worry. If you buy direct from an airline and pay with a credit card, you can claim back from the bank if the carrier goes bust. Check with your credit card company.

- INDEPENDENT