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KLM Strategist Pledge For Chapter 11 System  
User currently offlineJana From Antigua and Barbuda, joined Sep 2009, 110 posts, RR: 0
Posted (2 years 3 months 1 week 3 days 22 hours ago) and read 10486 times:

KLM Strategy Director and Skyteam Chairman Leo van Wijck is pledging to set up a Chapter 11 system in Europe aslike in use in the USA. Is Air France-KLM in big financial troubles?

[Edited 2012-06-12 00:22:12]

25 replies: All unread, showing first 25:
 
User currently offlineBurkhard From Germany, joined Nov 2006, 4397 posts, RR: 2
Reply 1, posted (2 years 3 months 1 week 3 days 22 hours ago) and read 10451 times:

This is a far fetched conclusion, but interesting to think about :lol:

Indeed the Chapter 11 is a big advantage for US companies compared to the rest of the world, especially Europe, where a failure means the end nowadays that state bailouts are prohibited.


User currently offlinePlaneInsomniac From Canada, joined Nov 2007, 678 posts, RR: 0
Reply 2, posted (2 years 3 months 1 week 3 days 22 hours ago) and read 10382 times:

It will be interesting to see how many self-proclaimed supporters of the "level playing field" will speak up on THIS particular issue.


Am I cured? Slept 5 hours on last long-haul flight...
User currently offlinekl911 From Czech Republic, joined Jul 2003, 5141 posts, RR: 15
Reply 3, posted (2 years 3 months 1 week 3 days 19 hours ago) and read 9949 times:

That would be interesting to read, you have a link / source?

User currently offlineJana From Antigua and Barbuda, joined Sep 2009, 110 posts, RR: 0
Reply 4, posted (2 years 3 months 1 week 3 days 18 hours ago) and read 9626 times:

There you are... the high word is out! Imo Air France 'robbed' KLM's once well up-to-the-lid filled treasury case and now it's empty, KLM might be sold to Etihad to save Air France's future. And what about Transavia in this future adventure...?? Of course the source below mentions a possible joint venture/cooperationship with Etihad but this might be a 'good news show' for the time being: the problems are probably much worser. Simply concluded: Air France needs cash and very soon...

Source: Telegraaf
http://www.telegraaf.nl/dft/12339604...France_KLM_samen_met_Etihad__.html



[Edited 2012-06-12 04:37:57]

User currently offlineJana From Antigua and Barbuda, joined Sep 2009, 110 posts, RR: 0
Reply 5, posted (2 years 3 months 1 week 3 days 18 hours ago) and read 9611 times:

Quoting kl911 (Reply 3):
That would be interesting to read, you have a link / source?

Sorry, Dutch only:

Source: http://www.deaandeelhouder.nl/news/2...illissement_zou_uitkomst_zijn_voo/


User currently offlineual777uk From United Kingdom, joined Nov 2005, 3356 posts, RR: 1
Reply 6, posted (2 years 3 months 1 week 3 days 18 hours ago) and read 9539 times:

When someone like Leo comes out with comments like that you have to think that there is a very big problem here. Is the AF/KLM group really hurting that much??

User currently offlineJana From Antigua and Barbuda, joined Sep 2009, 110 posts, RR: 0
Reply 7, posted (2 years 3 months 1 week 3 days 18 hours ago) and read 9484 times:

Europeans are sitting on their money. Economy slows down and has come to a near hold. Legacy carriers come into problems soon or later, even Lufthansa. Even LCC FlyBe announced financial troubles. Without a Chapter 11 system in Europe we shall see European airlines go bust.

[Edited 2012-06-12 04:46:31]

User currently offlineSASMD82 From Netherlands, joined Mar 2007, 771 posts, RR: 0
Reply 8, posted (2 years 3 months 1 week 3 days 16 hours ago) and read 9188 times:
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Quoting Burkhard (Reply 1):
Indeed the Chapter 11 is a big advantage for US companies compared to the rest of the world, especially Europe

O no, I do not hope so. Let's keep the system that does not support money losing companies to keep losing money for some time. BTW, in the Netherlands, we have already got a system like this and it is called 'onder curatele' which litteraly means' under protection (don't know if curatorship means the same).

Sorry to be off topic but let's take Spain as an example. Spain has got huge debts and huge financial difficulties. Take a look at FC Barcelona and Real Madrid which have a debt of around 1.5 billion together. And still they can buy new players. How the hell is that possible. In the Netherlands, when a football club has a debt of 5 million euros, it has dificulties to keep its licence.

Quoting Jana (Reply 4):
Imo Air France 'robbed' KLM

Northwest Airlines did the same in the early 90s, didn't they?


User currently offlineLOWS From Austria, joined Oct 2011, 1155 posts, RR: 1
Reply 9, posted (2 years 3 months 1 week 3 days 16 hours ago) and read 9110 times:

Quoting SASMD82 (Reply 8):
Northwest Airlines did the same in the early 90s, didn't they?

With the CO golden share?

Quoting SASMD82 (Reply 8):
don't know if curatorship means the same).

More or less, yes. In British English it'd be „receivership.“ In US English, „Bankruptcy Protection“


User currently offlinePanAm788 From United States of America, joined Sep 2008, 291 posts, RR: 0
Reply 10, posted (2 years 3 months 1 week 3 days 11 hours ago) and read 6771 times:

Quoting SASMD82 (Reply 8):
O no, I do not hope so. Let's keep the system that does not support money losing companies to keep losing money for some time.

The whole point of Chapter 11 is to turn money losing companies into profit making companies by enabling them to get rid of expensive contracts/agreements.

The sooner Europe realizes that everything can't run at a loss the better.



You know nothing Jon Snow
User currently offlinebueb0g From United Kingdom, joined Jul 2010, 643 posts, RR: 0
Reply 11, posted (2 years 3 months 1 week 3 days 11 hours ago) and read 6586 times:

Quoting PanAm788 (Reply 10):
The whole point of Chapter 11 is to turn money losing companies into profit making companies by enabling them to get rid of expensive contracts/agreements

/ keep companies that have no right to exist any more open while their creditors lose the little money they had



Roger roger, what's our vector, victor?
User currently offlineMrv85 From Netherlands, joined Jun 2012, 22 posts, RR: 0
Reply 12, posted (2 years 3 months 1 week 3 days 11 hours ago) and read 6401 times:

Quoting SASMD82 (Reply 8):
'onder curatele'

I think what you mean is 'surceance', which means that you are protected from you creditors for a while. 'onder curatele' is when control of your finances has been taken away from, for example because you are mentally incapable of doing your own finances due to an ilness or handicap.

As far as I keen see, the Dutch version of chapter 11 more often than not leads to bankruptcy, whereas the American chapter 11 is a bigger chance to get out in a better shape.

Allthough I do feel that the Dutch (and as far as I can see/guess other European country's aswell) system leads to a negative outcome, i.e. bankruptcy to often, it feels to me as if, and please correct me if I'm wrong, chapter 11 in the States is a kind of reset button, which may be good for the company and its employees since it gets them out of obligations hampering them in their future succes, however, it seems to me that this puts the pain of the company under protection's(previous) management's mistakes on the creditors.

Then again, please correct me if I'm wrong, I would love to know how other people feel about this 'resetting your own mistakes opinion in chapter 11' idea I have of chapter 11.


User currently offlinePanAm788 From United States of America, joined Sep 2008, 291 posts, RR: 0
Reply 13, posted (2 years 3 months 1 week 3 days 10 hours ago) and read 6378 times:

Quoting bueb0g (Reply 11):
/ keep companies that have no right to exist any more open while their creditors lose the little money they had

So your solution would be to let AF/KL (and all other loss making European airlines for that matter) fail?



You know nothing Jon Snow
User currently offlineJana From Antigua and Barbuda, joined Sep 2009, 110 posts, RR: 0
Reply 14, posted (2 years 3 months 1 week 3 days 10 hours ago) and read 5853 times:

Quoting SASMD82 (Reply 8):
O no, I do not hope so.
Quoting PanAm788 (Reply 13):
So your solution would be to let AF/KL (and all other loss making European airlines for that matter) fail?

Sure, the tax payer must not become a victim of failing commercial enterprises. The shareholders must pay the bill.


User currently offlineAlias1024 From United States of America, joined Oct 2004, 2760 posts, RR: 2
Reply 15, posted (2 years 3 months 1 week 3 days 9 hours ago) and read 5697 times:

Quoting Jana (Reply 14):
Sure, the tax payer must not become a victim of failing commercial enterprises. The shareholders must pay the bill.

The shareholders pay in a Chapter 11 bankruptcy. Typically the shareholders are completely wiped out. They receive nothing. The bondholders and other creditors will lose money too, but in Chapter 11 bankruptcy the creditors get to decide whether the business will reorgainze or liquidate (and convert to a Chapter 7 liquidation), usually based on which is likely to recover the most money for the creditors. Tax payers involvement isn't really anything, other than costs of running the courts.



It is a mistake to think you can solve any major problems with just potatoes.
User currently offlinevegetables2001 From UK - England, joined Mar 2012, 93 posts, RR: 0
Reply 16, posted (2 years 3 months 1 week 3 days 9 hours ago) and read 5469 times:

Quoting Jana (Reply 7):
Even LCC FlyBe announced financial troubles.

'
FlyBe isn't a LoCo, that's its problem it's a dog's dinner of different ideas.

Quoting Jana (Reply 7):
Without a Chapter 11 system in Europe we shall see European airlines go bust.

So what? No company deserves to exist if it doesn't make money.

Quoting PanAm788 (Reply 10):
The whole point of Chapter 11 is to turn money losing companies into profit making companies by enabling them to get rid of expensive contracts/agreements.

The sooner Europe realizes that everything can't run at a loss the better.

There is something sinister about this statement, also it's highly amusing to be lectured about loss making airlines by Americans.

Quoting PanAm788 (Reply 13):
So your solution would be to let AF/KL (and all other loss making European airlines for that matter) fail?

Absolutely, what is the point of AF/KL existing if it doesn't make money - apart from French national ego?

Quoting Burkhard (Reply 1):
especially Europe, where a failure means the end nowadays that state bailouts are prohibited.

If AF/KL or LH gets into severe financial hardship a way would be found. A German or French company is a different case to a Hungarian one.

Quoting SASMD82 (Reply 8):
Sorry to be off topic but let's take Spain as an example. Spain has got huge debts and huge financial difficulties. Take a look at FC Barcelona and Real Madrid which have a debt of around 1.5 billion together.

Corruption or moral bankruptcy take your pick.



A306,319,333 ATR72 BAC113/5, B703/704,717,721,732/3/4/5/7/8,741/1/4,757,763,773/E, DC8-6,9-3/5,10-30, DC106
User currently offlineairbazar From United States of America, joined Sep 2003, 8379 posts, RR: 10
Reply 17, posted (2 years 3 months 1 week 3 days 8 hours ago) and read 5098 times:

Quoting SASMD82 (Reply 8):
In the Netherlands, when a football club has a debt of 5 million euros, it has dificulties to keep its licence.

Two words: cash flow.

Quoting PanAm788 (Reply 10):
The whole point of Chapter 11 is to turn money losing companies into profit making companies by enabling them to get rid of expensive contracts/agreements.

While the executives who caused it get a golden parachute. That is fair why? Ch11 should be abolished.


User currently offlineLFutia From Netherlands, joined Dec 2002, 3339 posts, RR: 27
Reply 18, posted (2 years 3 months 1 week 3 days 5 hours ago) and read 3939 times:

When AF bought KLM was KL in that much financial trouble only to have AF suck more money out of them? Based on De Telegraaf article seems like KLM is deep deep doo doo..

Isn't NL one of the stronger countries so far during the huge Eurocrisis right now?

I quote Peter Hartman from one of the Jaarverslag ""Maar de naam zal KLM blijven, blauw blijft blauw. Dat is mijn missie." - Peter Hartman - CEO of KLM" wonder if this is true should they ever get to the bottom...

Leo/ORD



Leo/ORD -- Groetjes uit de VS! -- Heeft u laatst nog met KLM gevlogen?
User currently offlineRevelation From United States of America, joined Feb 2005, 12562 posts, RR: 25
Reply 19, posted (2 years 3 months 1 week 3 days 4 hours ago) and read 3552 times:

Quoting PanAm788 (Reply 10):
The whole point of Chapter 11 is to turn money losing companies into profit making companies by enabling them to get rid of expensive contracts/agreements.

I suppose that's one way to say it, but it's far from the full story.

The ones holding those contract/agreements are the ones who get to decide if they prefer to let the company come back to life with themselves as partial owners and potentially making back what they're owed, or if they want to liquidate the company to get back a fraction of what they are owed. In the airline business quite often they choose to become partial owners, but in many other businesses liquidation seems to be much more frequent.

Also there is nothing stopping the introduction of such a system to Europe, but I doubt a single airline executive has the clout to get it done, so there doesn't seem to be much of a story here.



Inspiration, move me brightly!
User currently offlineSSTsomeday From Canada, joined Oct 2006, 1276 posts, RR: 1
Reply 20, posted (2 years 3 months 1 week 3 days 1 hour ago) and read 3059 times:

Quoting Jana (Reply 7):

Europeans are sitting on their money. Economy slows down and has come to a near hold. Legacy carriers come into problems soon or later, even Lufthansa. Even LCC FlyBe announced financial troubles. Without a Chapter 11 system in Europe we shall see European airlines go bust.
Quoting PlaneInsomniac (Reply 2):

It will be interesting to see how many self-proclaimed supporters of the "level playing field" will speak up on THIS particular issue.
Quoting PanAm788 (Reply 13):
So your solution would be to let AF/KL (and all other loss making European airlines for that matter) fail?

Frankly I think this ability for airlines to rob employees of their pensions in order to survive is terrible. The big execs still get their big paychecks while thousands of people lose thousands of dollars that they have worked for. I think a company should fail before so many working stiffs get screwed like that. And the assets go to the pension fund. People in the work force can eventually find other employment, but the years that employees have logged building their pensions are gone forever.

Oh, the carnage...!



I come in peace
User currently offlineJana From Antigua and Barbuda, joined Sep 2009, 110 posts, RR: 0
Reply 21, posted (2 years 3 months 1 week 2 days 22 hours ago) and read 2397 times:

Quoting SSTsomeday (Reply 20):
People in the work force can eventually find other employment, but the years that employees have logged building their pensions are gone forever.

Imo you cannot lose your pension when a company goes bust.


User currently offlinejoop From Netherlands, joined Jan 2005, 4 posts, RR: 0
Reply 22, posted (2 years 3 months 1 week 2 days 22 hours ago) and read 2385 times:

In the AF/KL group KL is the one who is making the money.
Although it´s always good to look if you can work more effcient, at Air France it´s really time to have a clear look in the mirror.
If you see how many aircraft are parked at CDG as standby you´re puttinjg a lot of money down the drain.
Furthermore, if cabin crew needs to be judged for ther performance an extra cabin crew member is flying along, costing salary, extra hotel, daily allowance etc. while at KL this is done by the purser.
The regular strikes at AF are costing the company a fortune as well.
And so there are much more examples where there is a lot of money to save.
At the time AF took over KL, KL was a relatively healthy company. Maybe too small to survive on their own but now I have the feeling they are sucked out by AF and the profit KL is making goes directly to AF to fill up the losses they make.
I strongly wish the words KL CEO spoke that KLM stays KLM and blue remains blue but I´m afraid that within a couple of years KLM is only history.


User currently offlineJana From Antigua and Barbuda, joined Sep 2009, 110 posts, RR: 0
Reply 23, posted (2 years 3 months 1 week 2 days 22 hours ago) and read 2331 times:

Quoting joop (Reply 22):
I strongly wish the words KL CEO spoke that KLM stays KLM and blue remains blue but I´m afraid that within a couple of years KLM is only history.

Light blue please, not that dark one...


User currently offlinelijnden From Philippines, joined Apr 2003, 564 posts, RR: 1
Reply 24, posted (2 years 3 months 1 week 2 days 19 hours ago) and read 2160 times:
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AF/KL losses are huge and the shares are now doing € 3,21 each compared to € 38,00 in 2007. That is more than a 90% drop in 5 years. Deutsche Bank even predicts a further drop to € 2,10! Needless to say, with these numbers the whole group has been subjected to be taken over and/or one must wonder about the survivability in the next 1-3 years. That is probably the reason the guy wants a CH11 system like the USA.

I forsee a split-up of the AF/KL group in bits and pieces to be sold off to the highest bidder. Because of that, KLM will cease to exist.



Be kind to animals!
User currently offlineSomeone83 From Norway, joined Sep 2006, 3388 posts, RR: 3
Reply 25, posted (2 years 3 months 1 week 2 days 19 hours ago) and read 2142 times:

Quoting Jana (Reply 7):
Without a Chapter 11 system in Europe we shall see European airlines go bust.
Quoting Burkhard (Reply 1):
Indeed the Chapter 11 is a big advantage for US companies compared to the rest of the world, especially Europe, where a failure means the end nowadays that state bailouts are prohibited.

The new German bankruptcy laws that came into effect this spring offers a Chapter 11 like posibility. So the rest of Europe are slowly catching up


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