Check your airline's financial health before buying a ticket

With airlines filing for bankruptcy in rapid succession, it's hard to know what to do as a consumer. Each time you book a ticket, do you feel a bit of apprehension, wondering if you'll really get where you're going? If an airline isn't having money troubles, there are always weather and safety concerns to disrupt your flight.

So what can consumers do? Well it's important to know that when an airline stops flying, if you've paid with a credit card, you'll most likely get your money back. That alone should be incentive enough to pay for all airline tickets with a credit card. If you pay any other way, your chances of getting your money back decrease significantly.

But even if you get your money back, the inconvenience and cost of trying to find a new flight may be very painful. I don't want to be put in that position. So as silly as this sounds, I'm not booking an airline ticket to anywhere without checking the financial health of the airline first.Does that sound odd to you? Well it sure isn't a foreign concept in the insurance industry. Companies like A.M. Best specialize in analyzing the financial health of insurance companies. Any consumer considering buying insurance should look at those ratings to make sure that their insurance company is in good financial shape. After all, do you really want to buy insurance from a company that might go belly-up just as you have a claim that needs to be paid?

While there isn't a company or an agency that currently rates airlines, that doesn't mean consumers can't do their own research. Quite simply, when you're booking a flight, stick with the airlines that appear to be in the best of financial health. If you take a chance and book with an airline that is on shaky ground, you run a greater risk of being left high and dry by an airline that files bankruptcy and stops flying.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
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