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MH contingencies and TI info

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Cynicor

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In light of the most recent MH tragedy the risk of a collapse seems significantly higher. My condolences go out to family and friends of the passengers and crew.

Whilst I understand that this was an accident that could have happened to any airline, I think many around will be less forgiving. This is reinforced by the news reports already out focusing on fling there and the fact that airlines such as QF and Delta, who barely fly in that part of the world, are swiftly saying they avoid the area.

I thought this thread could outline those TIs that cover insolvency or collapse of an airline and what steps people were taking to ensure they still managed to get to their future destinations where they have booked on MH.

I'll start as I'm tossing up some options for a late Dec J award flight to BKK.

I don't think TID cover this situation so I will check the PDS. Used Amex MR-> Enrich so will also check that PDS. Also thinking of booking a refundable (minus fee) J Thai fare as backup.

Any other thoughts or situations?
 

opusman

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If you pay for flights with a credit card then you would be protected under normal merchant rules for non-delivery of product (as e.g. Ansett pax were after it collapsed).
 

Cynicor

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MH Collapse contingencies and TI info

Yes, this is a great point. It is not about the money (for me) but getting to your final destination in a timely manner. The CC refund will not rebook a ticket and they may be significantly more expensive at the time of any collapse.
 

moa999

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Couple of points:
- Various Malaysian Government funds hold 70%+ of MH stock
- I believe Government also controls a vast chunk of MAHB (the listed Airports operator)

A collapse of MH would thus hit the government hard, as well as tourism (from stopovers etc) and traffic would likely go to airlines based in other countries.

While I think most will think MH is just very unlucky in this instance (given there were a number of other airliners flying the same paths) it will undoubtedly have some impact on yields.

But given the above, I think the MH government can't not afford to bail it out if it gets to it.


Think also it should be noted
 

burmans

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Couple of points:
- Various Malaysian Government funds hold 70%+ of MH stock
- I believe Government also controls a vast chunk of MAHB (the listed Airports operator)

A collapse of MH would thus hit the government hard, as well as tourism (from stopovers etc) and traffic would likely go to airlines based in other countries.

While I think most will think MH is just very unlucky in this instance (given there were a number of other airliners flying the same paths) it will undoubtedly have some impact on yields.

But given the above, I think the MH government can't not afford to bail it out if it gets to it.


Think also it should be noted
Yes, I do suspect there is a reasonable chance the goverment may look to a bailout. Two events like this would damage most companies but I dont know if they indicate MH is a fundamentally bad company. Yes I know MH have financial issues but frankly so do many if not most airlines worldwide.

Most countries will be prepared to support a flag carrier should push come to crunch IMO.
 

drron

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I also doubt that Malaysia would stand by and do nothing re MH.
That said they may let MH be bankrupted,seize or buy the assets and start a new airline.Probably then wouldn't be in OW.

MH have just announced they will allow ticketing changes without charge as long as they are made by Friday July 25.
 

rickylee

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I suspect MH would be talking to its *O partners about a rescue package.

Of course, QF is no longer in a position to take it over, which is a pity. It could have been the Asian hub airline strategy fulfilled, if QF hasn't been run to ground in the last few years already.
 

MrHyde

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I have been looking at booking MH to DEL in September this year for the whole family and they are now getting a bit nervous. I personally think that MH is a safe airline and the MH17 was out of their control (arguments around avoid Ukraine aside). I'd be interested in knowing if there are any TI policies that do cover insolvencies.
 

scheps

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I agree, if what is available on the web holds true regarding being shot down etc, then it is extremely unlucky. Was it intentional? if so, unavoidable. If unintentional, then I would have thought a 777 is very easily identified, given they are likely to see several on a daily basis.

My gut feeling is the government can not afford for MH to collapse.
 

Austman

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I'd be interested in knowing if there are any TI policies that do cover insolvencies.
My CC card insurance (underwritten by Zurich Insurnace) seems to cover it:
We cover you for cancellation of travel arrangements and other expenses incurred after you have obtained your overseas travel ticket and up until the end of the journey, where the claim is not covered elsewhere in this policy and is for any of the following unexpected events:

(m) financial insolvency or financial collapse of the licensed travel services provider through whom your travel bookings were made;

Also, cover for the financial insolvency or financial collapse of a licensed travel services provider is limited to $5,000 per person up to $12,000 for a cardholder travelling with their spouse and/or dependent children, provided you have recovered the maximum amount available from any statutory fund, compensation schemeor any other source.

‘travel services provider’ means any scheduled services airline, ...
 

Lowjhg

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I agree, if what is available on the web holds true regarding being shot down etc, then it is extremely unlucky. Was it intentional? if so, unavoidable. If unintentional, then I would have thought a 777 is very easily identified, given they are likely to see several on a daily basis.

My gut feeling is the government can not afford for MH to collapse.
Maybe SQ could re-merge with MH to recreate Malaya Airlines :p
 

equus

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Some CC linked policies may well off the cover, most likely if they have a condition that you must have booked the travel on the card in order to be covered. If you have done this, then they have little exposure, as the costs of the money paid to the insolvent entity are covered by being able to charge back. The remaining risk (change to more expensive tickets etc) is not a risk related to the insolvency - it is the same as the risk of any other reason that causes such a change.

Note that as the card issuer, they are not the ones responsible for paying out the refund, that falls to the merchant acquirer (which ever bank provides the CC facility to the failed provider).

General Travel Insurance policies, where you may have paid cash for the ticket, can't rely on this, and so would be exposed to the insolvency risk. In avoiding that part of the risk by their T&C they also remove cover for some of the other aspect.
 
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Himeno

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Of course, QF is no longer in a position to take it over, which is a pity. It could have been the Asian hub airline strategy fulfilled, if QF hasn't been run to ground in the last few years already.
and just a few years ago there was talk of a QF/MH merger.
 

Austman

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General Travel Insurance policies, where you may have paid cash for the ticket, can't rely on this, and so would be exposed to the insolvency risk. In avoiding that part of the risk by their T&C they also remove cover for some of the other aspect.
Checked 3 x general TIs that I have bought and they all seemed to cover it too. Not a big sample, but that's 4 out of 4 of the policies that I've had.
 

Sprucegoose

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Too much Malay pride around......I have return J tickets that I won't be applying a refund for
 

AdMEL

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If you pay for flights with a credit card then you would be protected under normal merchant rules for non-delivery of product (as e.g. Ansett pax were after it collapsed).
Whilst this is true, it won't apply in the OP's case, due to it being a reward ticket.

My CC card insurance (underwritten by Zurich Insurnace) seems to cover it:

We cover you for cancellation of travel arrangements and other expenses incurred after you have obtained your overseas travel ticket and up until the end of the journey, where the claim is not covered elsewhere in this policy and is for any of the following unexpected events:

(m) financial insolvency or financial collapse of the licensed travel services provider through whom your travel bookings were made;

Also, cover for the financial insolvency or financial collapse of a licensed travel services provider is limited to $5,000 per person up to $12,000 for a cardholder travelling with their spouse and/or dependent children, provided you have recovered the maximum amount available from any statutory fund, compensation schemeor any other source.

‘travel services provider’ means any scheduled services airline, ...
Interesting. I checked one of my cards whose insurance is also underwritten by Zurich and it appears ambiguous at best and contradictory at worst!

Under what is not covered:

the inability of the tour operator, wholesaler, transport provider, travel agent or any other service provider to complete arrangements or complete any part of a tour.
None of those terms are defined, unlike the one you quoted.

Then, in the section of what is covered:

Unexpected cancellation of travel arrangements and other unexpected expenses.

Unlimited for covered events, except for travel agent’s cancellation fee, which is limited to an amount equal to the lesser of A$500 or 15% of the value of the travel arranged by the agent.

Also, cover for the financial insolvency for financial collapse of a licensed service provider is limited to A$5,000 per person up to a maximum of
A$10,000 for a family.
Amex Plat Edge insurance terms and conditions state:

We will not cover losses under any sections of these Terms and Conditions which are recoverable from
any other source, or arising from:

the refusal, failure or inability of any person, company or organisation, including but not limited to
a travel agent, tour operator, accommodation provider, airline or other carrier, vehicle rental agency
or any other travel or tourism services provider to provide services or accommodation due to their
Insolvency or the Insolvency of any person, company or organisation they deal with.

Some CC linked policies may well off the cover, most likely if they have a condition that you must have booked the travel on the card in order to be covered. If you have done this, then they have little exposure, as the costs of the money paid to the insolvent entity are covered by being able to charge back. The remaining risk (change to more expensive tickets etc) is not a risk related to the insolvency - it is the same as the risk of any other reason that causes such a change.

Note that as the card issuer, they are not the ones responsible for paying out the refund, that falls to the merchant acquirer (which ever bank provides the CC facility to the failed provider).

General Travel Insurance policies, where you may have paid cash for the ticket, can't rely on this, and so would be exposed to the insolvency risk. In avoiding that part of the risk by their T&C they also remove cover for some of the other aspect.
Many credit cards only require you to pay $250 or $500 of your prepaid travel costs on the card, so they are still exposed.

Checked 3 x general TIs that I have bought and they all seemed to cover it too. Not a big sample, but that's 4 out of 4 of the policies that I've had.
Would you mind detailing which issuers/underwriters?
 

winfred

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and just a few years ago there was talk of a QF/MH merger.
I don't think any airline will be game enough to merge with or takeover MAS. It is a money losing business with the negative goodwill after the recent events.

Yes I think the Malaysian government will try to bail it out but it is a matter of whether it has the resources. Airlines work on very thin margins. A few % down on yield is enough to wipe out any cash buffer in their balance sheet. I think in MAS's case it will be a lot more than a few %.
 

jlien

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MAS, being the flag carrier for Malaysia means that the government will continue to do all it can to keep it looking proud.

The sad truth is the government will hold more value in looking outwardly strong than being fiscally robust, meaning they'll keep pumping money into the airline even if it's at the expense of other more important yet less visible issues such as education and health.
 
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