Clark Howard's Tips

What happens if an airline goes under?

August 9, 2005

A lot of people have been asking Clark about airline stocks lately, especially the stocks of companies that are in jeopardy of going bankrupt.

For stockholders, the picture is pretty grim. If a company files for bankruptcy, the stockholders get nothing. That's what you need to remember.

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Employees also are in for a tough time if an airline files for bankruptcy. They could end up making a lot less money because the bankruptcy proceedings eat into a company's profits.

For customers, a bankruptcy doesn't mean anything negative, and could, in fact, mean something good.

The deals could be tremendous.

Just remember not to buy tickets with a debit card, or fake Visa or Mastercard, as Clark likes to call them. If a company goes under, you have no chargeback rights to get your money back.

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