UnitedTristar From Germany, joined May 2004, 1265 posts, RR: 3
Reply 3, posted (10 years 3 weeks 2 days 16 hours ago) and read 4295 times:
Years ago when UA first filed for bankruptcy they forecasted that the new UA would be soo lean that their competitors would be forced to file to keep up with their cost structures. Now look at them. I laughed when the other carriers pushed for bills preventing airlines from doing in chapter 11 what UA did because they would be shooting them selves in the foot. Now look. They are all running to declare before the laws they pushed for take effect! Funny how things bite you in the butt. Its all about karma. I think these carriers will hurt from their competitors leaner costs. However if they are able to convince their creditors that they should renegotiate with out bankruptcy they will be in better shape. Otherwise they will be just in trouble when the new leaner UA NW and DL.
Commavia From United States of America, joined Apr 2005, 12844 posts, RR: 61
Reply 6, posted (10 years 3 weeks 2 days 16 hours ago) and read 4216 times:
I'm with MAH. In the end, I doubt that DL's and NW's bankruptcy will have much of an impact on AA or CO at all. As UnitedTristar said, there were tons of predictions when UA entered back in December 2002 that AA and others would be forced to file in order to remain competitive with what would be UA's dramatically reduced costs. Now, going on three years later, UA is still in bankruptcy and about to exit -- and their costs are only going to be slightly lower than AA's. And yet, in that same time, AA has managed to avoid bankruptcy, reduce its costs almost as much, if not as much, maintained at least some semblance of positive management-labor relations and employee morale (relative, of course, to other airlines) and dramatically simplified their operations. For AA and CO -- even considering that three of their legacy competitors are now in bankruptcy -- filing would not, IMO, be a winning proposition. Both companies have managed to reduce their costs almost as much -- if not as much -- as their counterparts in bankruptcy, without the inefficiency and pain of the bankruptcy process.
Sebring From Canada, joined Jul 2004, 1675 posts, RR: 14
Reply 11, posted (10 years 3 weeks 2 days 16 hours ago) and read 4151 times:
Notwithstanding what anyone thinks, the impact will depend on what it takes DL and NW to each come up with a restructuring plan that creditors and new equity can buy into. That means taking companies that are now losing millions of dollars a day into companies that can make, on average, $1 million a day or more under current conditions. I would submit that this cannot be achieved solely by gouging labor. The used aircraft market, especially for international-capable, decent widebodies, is exceptionally tight. Are lessors going to be as pliant as they were through the first half of UA's three-year bankruptcy stint? I think not. So while a restructured NW and DL would have lower costs, I don't see how they get there with their current staff size and fleet size. If NW is going to keep its Pacific franchise, which it must, and if DL is going to keep its ATL (strong southeast) franchise, what's in play? Memphis? Cincinnati? Less Detroit or less Minneapolis?
Incitatus From Brazil, joined Feb 2005, 4262 posts, RR: 13
Reply 14, posted (10 years 3 weeks 2 days 13 hours ago) and read 3904 times:
Companies that go into Ch 11 may never come out, or may come out as very different entities. It's damage to confidence - Delta stands to lose the most in Atlanta where Air Tran may start being regarded in equal terms by big spenders in air travel. I think it's awful to their local market there.
Continental may have to most to benefit in the markets from New York to continental Europe. With the strategy of every single large airline being international expansion, there isn't room for everybody to be a winner. Continental will do better and Delta's expansion will be modest.
American already got the big bang from Delta leaving Dallas, any further gain will be spread thin. Time for AA to augment the schedule between ATL and New York? I'd get a good laugh if they announced an LGA-ATL shuttle with hourly departures tomorrow. Business is war played in slow motion.
CO757bos2iah From United States of America, joined Aug 2005, 78 posts, RR: 0
Reply 16, posted (10 years 3 weeks 2 days 13 hours ago) and read 3854 times:
From todays Houston Chronicle :
Continental plans to sell securities
Continental Airlines said Tuesday it plans to sell as much as $1 billion in debt securities.
Continental intends to use the proceeds for "general corporate purposes," which may include repayment of debt, pension obligations and working capital requirements, the Houston-based airline said in a filing with the Securities and Exchange Commission.
Continental said Friday it will have a "significant" loss this year because of higher jet fuel costs.
While it didn't say they would pay some of the pension obligations it makes mention ,that we may.. We'll see.
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