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NW Mechanica Givebacks May Not Save Airline  
User currently offlineDAYflyer From United States of America, joined Sep 2004, 3807 posts, RR: 3
Posted (9 years 2 months 1 week 1 day 13 hours ago) and read 2044 times:

Article below.

MINNEAPOLIS - Looming right behind the question of whether Northwest Airlines Corp. mechanics will strike this week is another: Has the airline moved too late to avoid bankruptcy?

Analysts are starting to wonder — even assuming Northwest gets the $1.1 billion in cuts it wants from its unions.

Northwest lost more money in its last quarter alone than it proposes to save from mechanics each year. It faces hundreds of millions of dollars in pension payments next year. And jet fuel remains stubbornly expensive.

"We think the risk of bankruptcy is too high to continue to hold the stock," Standard & Poors analyst James Corridore wrote in a research note advising investors to sell.

He's not swayed by Northwest's $2.1 billion in cash.

"They've got what seems like a pretty high amount of cash, but a lot of that is dedicated to funding operating losses, or pending debt maturities," he said in an interview.

Most of the nation's older carriers are struggling. United Airlines and U.S. Airways Group Inc. are in Chapter 11. Northwest and Delta Air Lines Inc. have both said they may be forced into bankruptcy, too. Northwest has said it needs those worker pay cuts and changes in pension law to stay out of Chapter 11. Under the current law, it would need to contribute $800 million to its pension in 2006 and $1.7 billion in 2007.

Airline consultant Alan Sbarra of San Francisco said bankruptcy is the quickest path toward a major restructuring. Northwest has tried to avoid that.

"It seems very, very difficult to do, especially if you don't have the cooperation of labor," he said.

Delta has also tried to avoid bankruptcy, "and they're finally admitting that they're going to have to look at bankruptcy," he said. "It's a last resort, but it's also the only option in a lot of ways these days."

With bankruptcy, timing matters. The bankruptcy law becomes more restrictive on Oct. 17 — the new law will make it harder to pay bonuses to managers to keep them at the company, and will generally force companies to either exit bankruptcy or liquidate faster.

Delta has declined to say whether those changes figure into its bankruptcy planning. Northwest CEO Doug Steenland has said that it is one of many factors.

Some employees have speculated that Northwest wants to file for bankruptcy so it can impose terms on union workers. But Steenland has said repeatedly that the airline loses more than it gains in bankruptcy — and it's not cheap, for one thing.

United Airlines parent UAL Corp. reported spending $1.4 billion on reorganization during its second quarter alone, including $602 million related to unloading its pensions on the federal government's pension insurer.

"You start to hemorrhage money when you're in Chapter 11. So I think there's a lot of reason for Northwest not to file. I think those would outweigh any rush to file before the October changes," said Lowell Peterson, a bankruptcy expert with the law firm of Meyer Suozzi English and Klein in New York.


What must NW do to survive ? How about DL?


One Nation Under God
16 replies: All unread, jump to last
 
User currently offlineMtnmanmakalu From Ireland, joined Nov 2004, 515 posts, RR: 3
Reply 1, posted (9 years 2 months 1 week 1 day 13 hours ago) and read 2014 times:

This is old news to NWA employees- Been hearing it for a long time!!

Maybe instead of spending over $100 million in strike preps, and rewarding your Execs with 100's of thousands of $'s of bonuses last week alone, they should try to fix the problems: 1st on the list, get rid of Lorenzo, er, I mean Steenland and get a CEO that the employees respect and feel safe negotiating with!!

mtnman



I do, I don't, whatever.......
User currently offlineStirling From Italy, joined Jun 2004, 3943 posts, RR: 21
Reply 2, posted (9 years 2 months 1 week 1 day 13 hours ago) and read 1992 times:

I don't understand something......

How can an airline with $2.1 billion in the bank declare bankruptcy?

Quoting DAYflyer (Thread starter):
"They've got what seems like a pretty high amount of cash, but a lot of that is dedicated to funding operating losses, or pending debt maturities,"

?
It makes this statement sound even more true....

Quoting DAYflyer (Thread starter):
Some employees have speculated that Northwest wants to file for bankruptcy so it can impose terms on union workers.

But then again, the world of high-finance is not my specialty, someone explain....cause this doesn't add up!



Delete this User
User currently offlineFlyGuyClt From United States of America, joined Aug 2005, 537 posts, RR: 8
Reply 3, posted (9 years 2 months 1 week 1 day 13 hours ago) and read 1992 times:

-My Vote is for Bethune.

-Hoping NWA survives.

-Bethune=Honesty and Integrity and oh yeah, RESPECT for Co-Workers.

Safe Flying  

NWA employees are the hardest working in the business. Never more than one agent for a DC9 at the gate. Funny, I fly an "Express" carrier now and then and oh wow, for 50 pax you get 3 agents.

NWA Flight Attendants do more with less. Always have, always will,always get the job done.

How can you not break even with an 87% load factor?

What plan does NWA have to survive and thrive?

What will they do with the employees money?

How are they going to secure the future?

How are they going to compete with LCC's and KICK their A@@ if they invade NWA markets?

NWA employees are fighters. Give them a mission with a success in sight. They will put out more than any airline group out there !

LETS GET BUSY !

[Edited 2005-08-15 21:12:48]


Florida Express, Braniff II and ......
User currently offlineDAYflyer From United States of America, joined Sep 2004, 3807 posts, RR: 3
Reply 4, posted (9 years 2 months 1 week 1 day 13 hours ago) and read 1988 times:

Quoting Mtnmanmakalu (Reply 1):
and rewarding your Execs with 100's of thousands of $'s of bonuses last week alone, they should try to fix the problems

This is a big problem at most legacie carriers. Paid bonuses to higher-ups while losing money sure seems silly to me. The big 6 seem to not be able to respond to changing market conditions very rapidly.



One Nation Under God
User currently offlineMtnmanmakalu From Ireland, joined Nov 2004, 515 posts, RR: 3
Reply 5, posted (9 years 2 months 1 week 1 day 13 hours ago) and read 1960 times:

Quoting DAYflyer (Reply 4):

This is a big problem at most legacie carriers. Paid bonuses to higher-ups while losing money sure seems silly to me. The big 6 seem to not be able to respond to changing market conditions very rapidly.

The biggest problem is that it pisses of the rank-and-file employees and makes it hard to "feel the Company's pain" and give up wages and benefits "to help the Company" when they always seem to find a way to reward the Execs in control and f***ing up the Company while they all stand by waiting like sheep to slaughter!!! (what a run-on sentence!!)
 crazy 



I do, I don't, whatever.......
User currently offlineDALMD88 From United States of America, joined Jul 2000, 2571 posts, RR: 14
Reply 6, posted (9 years 2 months 1 week 1 day 13 hours ago) and read 1953 times:

As I keep saying, the airline problems are not labor costs. It is the lack of revenue. If you are flying around at 87% capacity and not making money you have a revenue problem. Everyone keeps saying there is over capacity in the industry. Where is it? If you are all flying full and not making money the problem might just be the rate you are charging for those seats.

User currently offlineDAYflyer From United States of America, joined Sep 2004, 3807 posts, RR: 3
Reply 7, posted (9 years 2 months 1 week 1 day 13 hours ago) and read 1941 times:

Quoting FlyGuyClt (Reply 3):
NWA employees are the hardest working in the business. Never more than one agent for a DC9 at the gate. Funny, I fly an "Express" carrier now and then and oh wow, for 50 pax you get 3 agents.

NWA Flight Attendants do more with less. Always have, always will,always get the job done.

How can you not break even with an 87% load factor?

+

Perhaps one thing all carriers can do is to get rid of the 6 layers of un-needed managers working in HQ that do nothing but check up on other people and report that they can cut more gate agents to the un-needed VP's, who report this to the President/CFO/CEO wo reports this to the board of directors.....all in the interest of saving their own necks.



One Nation Under God
User currently offlineDAYflyer From United States of America, joined Sep 2004, 3807 posts, RR: 3
Reply 8, posted (9 years 2 months 1 week 1 day 12 hours ago) and read 1918 times:

Quoting DALMD88 (Reply 6):
As I keep saying, the airline problems are not labor costs. It is the lack of revenue. If you are flying around at 87% capacity and not making money you have a revenue problem. Everyone keeps saying there is over capacity in the industry. Where is it? If you are all flying full and not making money the problem might just be the rate you are charging for those seats

This is also true, but the sheer competition for bodies to fill the seats has depressed the prices based on the fact there are so many seats available. I think the one feeds the other. I am glad to see fares incresing to help offset costs.



One Nation Under God
User currently offlineKarlB737 From United States of America, joined Mar 2004, 3122 posts, RR: 10
Reply 9, posted (9 years 2 months 1 week 1 day 10 hours ago) and read 1846 times:

Courtesy: Minnesota Public Radio

Impact Of New Bankruptcy Laws On Northwest Airlines Uncertain


http://news.minnesota.publicradio.or...baxtera_bankruptcylaw/?rsssource=1


User currently offlineIsitsafenow From United States of America, joined Feb 2004, 4984 posts, RR: 23
Reply 10, posted (9 years 2 months 1 week 1 day 8 hours ago) and read 1770 times:

STIRLING..post two.......Its not their money....all but 400 million is borrowed.
safe



If two people agree on EVERYTHING, then one isn't necessary.
User currently offlineCkfred From United States of America, joined Apr 2001, 5272 posts, RR: 1
Reply 11, posted (9 years 2 months 1 week 16 hours ago) and read 1653 times:

Technically, if one's debts exceed one's assets, you're bankrupt. Now, the average homeowner is probably bankrupt technically, because the mortgage and other obligations exceed savings and other assets.

The reason that NW might file for bankruptcy, even with $2.1 billion, is that it needs that cash to pay debts that come due after the filing of the bankruptcy petition.


User currently onlineRevelation From United States of America, joined Feb 2005, 12714 posts, RR: 25
Reply 12, posted (9 years 2 months 1 week 9 hours ago) and read 1585 times:

Quoting DAYflyer (Thread starter):
What must NW do to survive?

Replace the DC-9s with B717s?  confused 

That's what everyone was saying here a few months ago.  innocent 



Inspiration, move me brightly!
User currently offlineKarlB737 From United States of America, joined Mar 2004, 3122 posts, RR: 10
Reply 13, posted (9 years 2 months 1 week 8 hours ago) and read 1568 times:

Courtesy: KARE-TV

Fuel Prices Present Another Hurdle To Northwest Airlines

http://www.kare11.com/news/news_article.aspx?storyid=105063

Video Report:

http://www.kare11.com/player.aspx?aid=17503&bw=


User currently offlineM404 From United States of America, joined Nov 2003, 2227 posts, RR: 5
Reply 14, posted (9 years 2 months 1 week 7 hours ago) and read 1526 times:
Support Airliners.net - become a First Class Member!

When the 1.1 Billion figure was released fuel was near 50 a bbl. Now it's 65. I'd say more will be needed.


Less sarcasm and more thought equal better understanding
User currently offlineNWAFA From United States of America, joined Dec 2003, 1893 posts, RR: 15
Reply 15, posted (9 years 2 months 1 week 4 hours ago) and read 1470 times:

Sorry M404

I have given and given in my 19 years. I am yet to be re-payed for what I gave in 1992. IM DONE GIVING!!



THANK YOU FOR FLYING NORTHWEST AIRLINES, WE TRULY APPRECIATE YOUR BUSINESS!
User currently offlineAviatorTJ From United States of America, joined Jul 2003, 1838 posts, RR: 7
Reply 16, posted (9 years 2 months 1 week 4 hours ago) and read 1469 times:

Quoting NWAFA (Reply 15):
I have given and given in my 19 years. I am yet to be re-payed for what I gave in 1992. IM DONE GIVING!!

So are you supporting AMFA throughout the troubles? I know that PFAA is going to be put through its tests in the near future, so hopefully there won't be any burned bridges. Either way, not everyone is going to leave happy in these situations.


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