MCOtoATL
Topic Author
Posts: 448
Joined: Sat Sep 25, 1999 12:01 pm

How Do Other Countries Handle Bankruptcy

Fri Dec 20, 2002 5:47 pm

With United Airlines declaring Chapter 11, many people in the US are obviously unclear about this process. United Airlines is not going out of business; chapter 11 provides some protection form creditors as the carrier seeks to restructure.

This made me wonder about how US bankruptcy compares to that of other nations. Do struggling carriers simply disappear in various countries, or are their steps to try to turn the tide?
 
Ikarus
Posts: 3391
Joined: Mon Jan 08, 2001 10:18 pm

RE: How Do Other Countries Handle Bankruptcy

Fri Dec 20, 2002 9:01 pm

The general procedure:

Liquidation. Complete disappearance of the airline, often overnight, sometimes leaving pax stranded all over the place (the old Germanwings, for example)

If it's a former national carrier in Europe:

Bail-out by the government.

Chapter 11 is quite a good thing. Quite useful. The Economist just had an article about all its advantages and why other countries should adopt the system...

Regards

Ikarus
 
backfire
Posts: 3467
Joined: Fri Oct 06, 2006 8:01 am

RE: How Do Other Countries Handle Bankruptcy

Fri Dec 20, 2002 9:50 pm

You'll only get a bail-out by the Government in Europe if the EC allows it, and they're not known for charity work. Look at the Olympic situation.
 
Jj
Posts: 1189
Joined: Sun Jun 24, 2001 7:40 am

RE: How Do Other Countries Handle Bankruptcy

Fri Dec 20, 2002 11:17 pm

I understand here in Argentina, airlines first go into "concurso de acreedores" , which is an equivalent of Chapter 11. If no solution is found, they are liquidated (Chapter 7).

FYI: Aerolineas Argentinas, Austral, LAPA (Prev. known as ARG, then as AIRG) have all been operating under concurso de acreedores for more than an year...
 
luisca
Posts: 1530
Joined: Thu Aug 16, 2001 11:37 am

RE: How Do Other Countries Handle Bankruptcy

Fri Dec 20, 2002 11:55 pm

Here in panama if you cant pay up you simply say BYE BYE. Unlles you can personally negotiate with the creditors to save your buissenes, goverment bail outs are banned by the constitution, but you got 4 months of grace period if you cant pay up.
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