Reader Question: What Happens To Existing Tickets If Malaysia Airlines Goes Bankrupt?

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It is still not certain what exactly happened to Malaysia Airlines flight MH370 that disappeared back in March and then the unfortunate incident of the shooting down the MH17 that was on its way from Amsterdam to Kuala Lumpur last week.

Reader Question Malaysia Airlines Bankrupty

Malaysia Airlines joined the Oneworld Alliance on February, 2013, and has been trying to turn their business around.

A LoyaltyLobby reader sent me the following question by email:

Just need an advise.  I am “building” my Platinum Membership with the Malaysia Airlines Enrich program and am due to fly again with them in the coming weeks.  (Unfortunately I started building this before the MH 370 incident and was Gold the other year).

May I ask you this question you should know the answer to:  In the unlikely event this airline files for bankruptcy (God forbid), and we get stuck in an airport (not completing the entire journey), will the airline be obliged to find alternative ways to get me to my ‘final destination’ and ‘back home?’

If Malaysia Airlines goes bankrupt and the Malaysian government decides not to pump more money into the operation, however unlikely this is, the tickets issued on Malaysia Airlines ticket stock to be flown on Malaysia Airlines (MH code) become worthless.

Other airlines may accept those flights that are marketed/operated under their flights, but ticketed by Malaysian Airlines.

The safest solution would be to ticket the Malaysia Airlines flight on some other airlines ticket stock that would be required to take care of the passenger in a case that Malaysia Airlines collapses.

Also, make sure that you pay the flights using credit cards and not debit cards or bank transfer that gives extra case of security of being able to do a charge-back, as this would be a case of undelivered services.

If you have travel insurance, it may also cover situations when the airline ceases its operations. Remember to read the fine print of your credit card terms.

Conclusion

It is extremely unlikely that the Malaysia Airlines would collapse, however horrible the current fiscal year turns out to be after these two incidents, as the airline is majority owned by the Malaysian government.

But if the airline continues to bleed fiscally, there are obviously steps that they must take such as reducing the number of routes and frequencies.

Personally, I wouldn’t book away from Malaysia Airlines flights, but do understand that some may feel contrary.

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