G500
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Airline Bankruptcies In Europe Vs North America

Sun Nov 18, 2012 5:11 pm

What are the main differences of an airline going bankrupt in the U.S or Canada vs the E.U?? Everybody is talking about the "end being near for SAS" because they're close to bankruptcy.

Here in the U.S several majors have gone bankrupt (a couple twice), only to comeback leaner and stronger..

Unless I'm missing something, it seems like in the E.U declaring bankruptcy means your lenders are about to take everything you own and close the shop
 
rutankrd
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RE: Airline Bankruptcies In Europe Vs North America

Sun Nov 18, 2012 5:42 pm

You ill have read my post on your earlier thread but i'll repeat it to start the conversation here.

In the case of the UK Administration need NOT lead to closure or immediate trading cessation.

Restructuring can be allowed , however since businesses end up loosing credit lines having drained cash flows suppliers demanding up front payment then mounting tax demands and extortionate Administration charges made on the business the administration practitioners seem more interested in:

Sale of assets, trade names, intellectual property and immediate mass redundancy (this costs them nothing because statutory redundancy is recoverable from the state !)

Their prime objective is getting what monies owed in paying taxman and themselves (The Administration Insolvency Practitioner) and screwing everyone else !

This leads to closures in many businesses that might survive with something closer to Chapter 11.
The losers are all creditors and shareholders . Benefactors insolvency practitioners such as KPMG , Deloitte, and Ernst and Young.
 
anstar
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RE: Airline Bankruptcies In Europe Vs North America

Sun Nov 18, 2012 5:43 pm

In the US you can enter a bankruptcy and be allowed to continue to operate but clear debts and reduce costs... in most other parts of the world bankruptcy means you have run out of cash and that is the end of the road - no chance to renegotiate contracts etc and the shop is shut.
 
Lufthansa
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RE: Airline Bankruptcies In Europe Vs North America

Sun Nov 18, 2012 5:47 pm

Okay having a degree in economics I have been going on about this for years.... so here is my big point.

IT DISTORTS THE MARKET!

the US chap 11 laws are a get out of jail free card. Now i know its tough on all involved. But think about this. I Run Air XQY. I spend too much trying to survive, and I pay more than I should to survive a strike and get everybody onside. AA, who is 100 times larger than me doubles their frequency per day to get me off the route because i'm hurting their yeilds by being there. The end is obvious.... so in a desperate attempt to survive I price to grab market share off AA. ... the end obvious happens and I get swollowed up by Air ABC. and the cycle continues. the problem is. If AA was well run... and it had to cut cost below the market level to survive... and ate into its capital to do so... it is now competing with an entity that should have gone broke. add chap 11 into that... and it gets 1000 times worse. Politics comes into it. No mayor wants their city to lose its hub status because businesses and intercontinental connectivity go with it. so they fight it. they pass laws that are get out of jail free cards. chap 11 basically says the creditors can get more as a going concern than as a whole. but at the end of the day...they took a risk and extended credit. if it looked too risky they shouldn't have done that. the same thing gives some (but not all, delta is a great example of a balanced company) employee groups the incentive to push a little too much via the union. get the point? it stops everybody facing reality. Europe right now is in this very very painful restructure process. But the rise of carriers like norwegian show its perfectly viable to do things differently. some just believed it would never happen. chap 11 distorts the free market. You extend credit you take a risk... no get out of jail free cards as far as I'm concerned. This is NOT the free market. Its playing favourites.
 
G500
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RE: Airline Bankruptcies In Europe Vs North America

Sun Nov 18, 2012 9:48 pm

Quoting anstar (Reply 2):
in most other parts of the world bankruptcy means you have run out of cash and that is the end of the road - no chance to renegotiate contracts etc and the shop is shut.

that's harsh but i do like that system, sort of "let the strong survive, and the weak perish"
 
BMI727
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RE: Airline Bankruptcies In Europe Vs North America

Sun Nov 18, 2012 10:08 pm

Quoting Lufthansa (Reply 3):
the US chap 11 laws are a get out of jail free card.

No they aren't. The only way for a bankruptcy to be successful and result in a restructuring is for the creditors and investors to buy into the plan. If that does not happen, the company is finished and will be liquidated anyway.

Chapter 11 is a temporary protection of a company's assets while they work to come up with a plan that the court and creditors can (mostly) agree on to fix the problems that caused the bankruptcy. Without that, the company is still dead. None of that could be considered a Get Out Of Jail Free Card without a serious dose of ignorance.

Quoting Lufthansa (Reply 3):
You extend credit you take a risk... no get out of jail free cards as far as I'm concerned.

So why would you not want a mechanism to possibly allow a debtor to restructure rather than just take a default? If you don't like the restructuring plan, the creditor can come out against it and there's a good chance they'll get their default.
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Lufthansa
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RE: Airline Bankruptcies In Europe Vs North America

Sun Nov 18, 2012 10:45 pm

Quoting BMI727 (Reply 5):
No they aren't. The only way for a bankruptcy to be successful and result in a restructuring is for the creditors and investors to buy into the plan. If that does not happen, the company is finished and will be liquidated anyway.

READ WHAT I SAID.... the company, if run bad HAS NO RIGHT TO EXIST! it is a get out of jail free card. You extend credit to somebody who mismanages it, it's your bad luck. As a creditor you lose. THAT is the free market, and that is why we charge higher interest rates on risker things!

as i said IT DISTORTS THE MARKET. I don't care about your company that needs to be saved. The fact is it WAS BADLY RUN, and perhaps...just maybe some of the staff and other stake holder groups have something to answer for as part of that.

in the process THEY DAMAGE OTHER MORE RESPONSIBLE COMPANIES and in the real free market, those companies should be the surviving entities. IE - after having gone through the blood bath competing with the irresponsible company their business should emerge as the survivor. And be able to then expand and fill the gap left by the badly run company. Think of it like economic darwinism.

[Edited 2012-11-18 14:46:05]
 
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par13del
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RE: Airline Bankruptcies In Europe Vs North America

Sun Nov 18, 2012 11:03 pm

Quoting Lufthansa (Reply 6):
as i said IT DISTORTS THE MARKET. I don't care about your company that needs to be saved. The fact is it WAS BADLY RUN, and perhaps...just maybe some of the staff and other stake holder groups have something to answer for as part of that.

in the process THEY DAMAGE OTHER MORE RESPONSIBLE COMPANIES and in the real free market, those companies should be the surviving entities. IE - after having gone through the blood bath competing with the irresponsible company their business should emerge as the survivor. And be able to then expand and fill the gap left by the badly run company. Think of it like economic darwinism.

One can easily apply these principles to a number governments who today function as business houses, thankfully, they have the power to raise taxes when they choose to cover their bad decisions.
When jobs are in the balance they offer inducements for companies to stay in business, tax breaks to build factories and expand their tax bases, of course one can always say that every company that suffered under the Global Economic crisis were poorly run and governments the world over should have done nothing to force its citizens to patronize those companies business to keep them afloat, but we digress from the central theme.
 
BMI727
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RE: Airline Bankruptcies In Europe Vs North America

Sun Nov 18, 2012 11:08 pm

Quoting Lufthansa (Reply 6):
READ WHAT I SAID.... the company, if run bad HAS NO RIGHT TO EXIST!

It has a right to exist if the creditors and investors allow it to. If a company loses a billion dollars per year, but investors pump in a billion dollars each year to cover it, then it has a right to exist. That's basically how Virgin America has worked since it started.

Quoting Lufthansa (Reply 6):
You extend credit to somebody who mismanages it, it's your bad luck. As a creditor you lose.

But, if you could work with a company while it's in bankruptcy so you might lose only a part of the loan, you'd do it. Of course, if you think the situation is so bad that you'll never get it back, you'll vote against the restructuring plan and get what you can in liquidation.

Quoting Lufthansa (Reply 6):
And be able to then expand and fill the gap left by the badly run company.

If creditors thought the struggling company was not salvageable, they'd deep six reorganziation and be more than happy to fund expansion of the competitors.
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flyingalex
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RE: Airline Bankruptcies In Europe Vs North America

Sun Nov 18, 2012 11:32 pm

Quoting g500 (Thread starter):
What are the main differences of an airline going bankrupt in the U.S or Canada vs the E.U?? Everybody is talking about the "end being near for SAS" because they're close to bankruptcy.

Here in the U.S several majors have gone bankrupt (a couple twice), only to comeback leaner and stronger..

Unless I'm missing something, it seems like in the E.U declaring bankruptcy means your lenders are about to take everything you own and close the shop

The difference lies in the different bankruptcy laws in the US and in Europe.

In the US, there are two "kinds" of bankrupt, one under Chapter 7 and one under Chapter 11 of the bankruptcy code. The latter means you're given some time to try and fix things, and that you can renege on all sorts of agreements with your previous creditors (which is how a lot of US airlines managed to ditch their union contracts and pension liabilities). The former means your company gets liquidated.

European bankruptcy laws don't really provide a Chapter 11 equivalent. If you file for bankruptcy over here, your company is very likely finished. That doesn't mean that there won't be anyone who picks up the company's assets and continues the business, but the original entity is usually toast.
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tdscanuck
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 12:21 am

Quoting Lufthansa (Reply 6):
READ WHAT I SAID.... the company, if run bad HAS NO RIGHT TO EXIST! it is a get out of jail free card. You extend credit to somebody who mismanages it, it's your bad luck. As a creditor you lose.

It's a "get-out-of-jail-with-a-hell-of-a-bail-and-probation-card." Calling it "free" is just misleading.

To get into Chapter 11 you need to convince your creditors you're worth more alive than dead and they (and the courts) can do pretty much whatever they want to you in the process. Chapter 11 is a huge loss, it's just (sometimes) a smaller loss than Chapter 7. If you're an economist, you know there's a huge inefficiency in the liquidation process itself...Chapter 11 is supposed to help alleviate some of that and recover more money that would otherwise be recoverable.

Tom.
 
Cubsrule
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 2:43 am

Quoting Lufthansa (Reply 6):
You extend credit to somebody who mismanages it, it's your bad luck. As a creditor you lose. THAT is the free market,

Unsecured creditors lose in C11 and C7 (and C13, where it's not uncommon to see unsecureds getting 20 or 30 cents on the dollar).

Quoting Lufthansa (Reply 6):
as i said IT DISTORTS THE MARKET. I don't care about your company that needs to be saved.

I don't understand how C11 distorts the market more than C7. The general provisions for paying creditors are the same with the exception that in C11 there tends to be more money around because the company is still generating revenue and, generally, is something like operationally profitable or it would not be in C11.
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Lufthansa
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 7:33 am

Quoting BMI727 (Reply 8):
But, if you could work with a company while it's in bankruptcy so you might lose only a part of the loan, you'd do it. Of course, if you think the situation is so bad that you'll never get it back, you'll vote against the restructuring plan and get what you can in liquidation.

You're not looking at the effect on the entire market place, just the welfare of an exiting company and its stakeholders. The issue, when applying legal principles to the marketplace should have a greater emphasis on maintaining a level playing field than this if we are going for true free market principles.

Quoting BMI727 (Reply 8):
If creditors thought the struggling company was not salvageable, they'd deep six reorganziation and be more than happy to fund expansion of the competitors.

Well that's wrong. Plenty of banks have made huge huge money out of bankruptcy financing. They are the first creditor to be paid in such instances. The risk on their part is often minimal. And its often not that the creditors don't think a company is salvageable, it with change (read good management and practices instead of doing what got it into the mess in the first place) often can be. After all it usually has a huge revenue steam coming in, it just needs to be dealt with differently. That isn't once again the point. the point is, what about about all the other competitors these companies damaged in the process? If the company is really that good, well it wouldn't be in bankruptcy in the first place and it also probably would have been able to raise new capital more easily.

Quoting Cubsrule (Reply 11):
I don't understand how C11 distorts the market more than C7. The general provisions for paying creditors are the same with the exception that in C11 there tends to be more money around because the company is still generating revenue and, generally, is something like operationally profitable or it would not be in C11.

It's simple. While companies engage in desperate attempts to survive they do things like price for market share. It's a going for broke mentality. It fosters a culture within an organisation that basically says "we'll all still have jobs we'll just go through the bankruptcy" which leads more extreme positions from things like union demands. It also lets middle level managers get more cocky in their demands (the bankruptcy judge will just force you to agree with what I want eventually anyway mindset). While all this kind of thing is going on, better run carriers aren't making what they should be. They take on debt, aren't able to reinvest where they should etc, and they end up weaker than they should be as a result. There are very very good reasons most of the world does not allow these kinds of re-organisations. It's not because they are concerned about the welfare of individual companies. It's because they are concerned about the health of the entire marketplace above that of an individual company. To put it in layman's terms, its about maintaining a level playing field.
 
s5daw
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 7:36 am

Quoting Lufthansa (Reply 3):
IT DISTORTS THE MARKET!

This is certainly an very interesting point of view, which makes sense to my layman mind.

But, consider this: there is much worse poison spreading in the EU, and it's called state aid.
Many European airlines received state aid or - what it really should be called - a bailout.
Some of the cases in point:
- Adria Airways
- Czech Airlines
- Malev (had to return it if memory serves well)
- SAS
- Air France
- Olympic
...

Now usually the reasoning behind state aid is very emotionally powered, at least in case of Adria which I can observe locally. "We save jobs, we keep the country connected to important destinations, blah blah blah."

In reality, keeping systems like some of those on life support just distorts the market and prevents competition from even showing up.

And it's far worse than chapter 11, where it's creditor's decision to throw good money after bad, as in case of state aid it's the tax payers who sponsor the aid, but have no real saying in it.

Of course, politics has their own interest in keeping the systems alive - which more or less is a guarantee for even more incompetent management, unnecessary job openings for friends etc. etc. In essence, most state aided systems are incubators of incompetence.
 
BMI727
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 8:28 am

Quoting Lufthansa (Reply 12):
You're not looking at the effect on the entire market place, just the welfare of an exiting company and its stakeholders.

The only way for a company to get a second chance via Chapter 11 is for the stakeholders to agree to give it one. Should the government have forced Virgin America to shut down because they didn't turn a profit and existed on additional investment?

Investors choose to put their capital into a company and creditors choose to lend to them. If they want to go along with a restructuring plan to try and salvage a struggling business, that is also their choice. It's only unfair in that private entities choose to put their resources in one company versus another.

If competitor happens to have investors with deeper pockets, that's not unfairness the government should seek to curtail unless it's blatantly anti-competitive.

Quoting s5daw (Reply 13):
But, consider this: there is much worse poison spreading in the EU, and it's called state aid.
Many European airlines received state aid or - what it really should be called - a bailout.

State bailouts are a different animal, and something I am completely against. If you cannot succeed without government money, it means you cannot succeed.

Quoting s5daw (Reply 13):
And it's far worse than chapter 11, where it's creditor's decision to throw good money after bad, as in case of state aid it's the tax payers who sponsor the aid, but have no real saying in it.

For the taxpayers, if all of the current investors and creditors do not find the business worthy of their money, why should the taxpayers have their money put on the line instead? If you go to the casino, you play differently when you play with someone else's chips.

[Edited 2012-11-19 00:33:31]
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Cubsrule
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 1:08 pm

Quoting Lufthansa (Reply 12):
It fosters a culture within an organisation that basically says "we'll all still have jobs we'll just go through the bankruptcy" which leads more extreme positions from things like union demands.

Are you aware of any empirical evidence supporting this assertion? I am not.
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s5daw
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 1:45 pm

Quoting Cubsrule (Reply 15):
Are you aware of any empirical evidence supporting this assertion?

Isn't SAS a point in case? Unions demanding the impossible to the point where operation is about to close?
 
Cubsrule
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 1:52 pm

Quoting s5daw (Reply 16):
Isn't SAS a point in case? Unions demanding the impossible to the point where operation is about to close?

And, alas, the European way is supposedly the one where that does not happen. That's sort of why I asked the question.
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s5daw
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 1:57 pm

Quoting Cubsrule (Reply 17):
And, alas, the European way is supposedly the one where that does not happen. That's sort of why I asked the question.

Ah sorry, got the two mixed up.

Well, in general I think US still has far superior free market to EU or to anybody else for that matter, and that still makes US the superpower it is.

On the other hand, I'm not sure free market is really the best solution in all areas (e.g. healthcare), but that is a different story.
 
rfields5421
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 2:06 pm

Quoting BMI727 (Reply 14):
The only way for a company to get a second chance via Chapter 11 is for the stakeholders to agree to give it one.

And who exactly are the stakeholders? The people who have put their investment and retirement money into the company, or the people who have decided to make direct loans to the company?

The Ch 11 process in the US encourages company leaders - who are supposed to be employees - to manage their company and focus on creditors, not the nominal owners of the company - the stockholders.

The Ch 11 process dramatically increases our government debt and obligations as companies use it to shed obligations to their employees and foster them onto the American people.

The Ch 11 process has ended the concept of stockholders as owners of the company, and replaced it with large lenders as practical owners of the company.

Quoting Cubsrule (Reply 11):
I don't understand how C11 distorts the market more than C7. The general provisions for paying creditors are the same with the exception that in C11 there tends to be more money around because the company is still generating revenue and, generally, is something like operationally profitable or it would not be in C11.

Ch 11 in the US has become a management restructing tool. An acceptable method of shedding company responsibilities rather than actually making the company deal with its obligations.

In the US, Ch 11 is no longer a situation where a company is in dire financial condition, but an option for management to get out of their mistakes - and not be held responsible.
 
Cubsrule
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 2:09 pm

Quoting rfields5421 (Reply 19):
In the US, Ch 11 is no longer a situation where a company is in dire financial condition, but an option for management to get out of their mistakes - and not be held responsible.

But generally, the entry requirements are the same for C7 and C11, aren't they? So in this "C11-less" alternate universe that some are proposing, we'd see management using C7 for the same purposes and creditors winding up getting paid even less.
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PITingres
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 2:53 pm

Quoting Lufthansa (Reply 12):
You're not looking at the effect on the entire market place, just the welfare of an exiting company and its stakeholders.

Sure, let's look at the *entire* market place, then. If there is no CH11 or equivalent, then instead of a reorganization, United (let's say, just for example) goes bust. That will pretty quickly vaporise a whole slew of their suppliers, in turn breaking some of the second level suppliers, and so on. To say that these secondary businesses should fail just because United's management made some bad decisions seems pretty unfair to me. Corporations are not abstract concepts, nor are they a few managers, they are people and they exist in a web of other corporations and people.

I don't know if the US style CH11 is generally a good way to do things or generally a bad way to do things, and since I have real work to do today   I can't be arsed to worry about it right now. I do think that treating the problem in simplistic, black-and-white, abstract terms will definitely get you to the wrong answer.
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breiz
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 3:13 pm

Quoting s5daw (Reply 13):
there is much worse poison spreading in the EU, and it's called state aid

That's a recurring argument.
In Europe, or elsewhere, states inject capital in ailing airlines because they are shareholders.
It is the duty of the shareholders to bring fresh capital when required, or to pull the plug.
Of course, depending where you look from, states may not be accepted as normal shareholders.
 
rfields5421
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 3:41 pm

Quoting Cubsrule (Reply 20):
But generally, the entry requirements are the same for C7 and C11, aren't they?

Not in practice in the US today.

For example - AMR filed for Ch 11 having substantial operational cash on hand, having previously arranged aircraft lease revisions, etc. AMR was not close to insolvency or having to shut down.

AMR would not have been allowed to file Ch 7 in that financial condition unless they could prove that the airline was going to be insolvent very soon.

A Ch 7 bankruptcy for companies is only filed when the company is near having no cash on hand.

Some Ch 11 bankruptcies for companies are later converted to Ch 7 and the company liquidated.

But in the airline industry in the US Ch 11 has simply become a tool for management to break 'bad' contracts they had agreed to previously. It is also used as a tactic to break union contracts.

The big difference is that in filing Ch 11 - the current management usually stays in place, where in filing Ch 7 - the current managment is very soon shown the door - without their separation bonuses, etc.

In Ch 7 the management will get the same shaft for pension, medical care, etc as the hourly workers. Under Ch 11, management retains their retirement bonuses, separation bonuses, incentive pay, etc - while the hourly workers get much less proportionally.
 
brilondon
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 3:58 pm

Quoting Lufthansa (Reply 6):
READ WHAT I SAID.... the company, if run bad HAS NO RIGHT TO EXIST! it is a get out of jail free card. You extend credit to somebody who mismanages it, it's your bad luck. As a creditor you lose. THAT is the free market, and that is why we charge higher interest rates on risker things!

I have read your ramblings and by doing so, you don't seem to have a grasp of what bankruptcy means in the US. There are different types of bankruptcy: There is the bankruptcy where you have no more money to cover your current operating expenses and have no more means of financing and have to shut down because you have no more money and no one will lend you any more. There is also the bankruptcy where you can still cover your current operating expenses but have no money left for you long term obligations such as loan repayments, pension funding, supplier payments and other long term obligations. This is what most airlines have filed for, to reorganize their obligations.

In Canada there is bankruptcy and then there is an instrument where by companies can reorganize their obligations and negotiate more favourable terms to help them through the cash shortage. It use to be called the CCRA but it has been updated and the name has changed.
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tdscanuck
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 3:59 pm

Quoting Lufthansa (Reply 12):
The issue, when applying legal principles to the marketplace should have a greater emphasis on maintaining a level playing field than this if we are going for true free market principles.

How is it not a level playing field when all companies are operating under the same law?

Now, if you're talking about international competitors I agree it's not a level playing field but the bankrupcy laws are hardly the gorilla in the room for that...let's see open skies treaties first before we squawk about an unlevel playing field due to bankrupcy laws.

Tom.
 
Cubsrule
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 4:10 pm

Quoting rfields5421 (Reply 23):
Not in practice in the US today.

If you read the code, you will find that cash on hand has nothing to do with the definition of insolvency (and thus the ability to seek protection).
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BMI727
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 6:37 pm

Quoting rfields5421 (Reply 19):
The people who have put their investment and retirement money into the company, or the people who have decided to make direct loans to the company?

Both. Of course if you're in bankruptcy, the first group is probably already in distress.

Quoting rfields5421 (Reply 19):
The Ch 11 process has ended the concept of stockholders as owners of the company, and replaced it with large lenders as practical owners of the company.

In some cases there's truth to that. But if you're in a position of losing money and possibly being unable to pay debts, you are going to beholden to the creditors.

Quoting breiz (Reply 22):
Of course, depending where you look from, states may not be accepted as normal shareholders.

I'd say that having states as shareholders is usually a pretty poor idea.

Quoting brilondon (Reply 24):
There is also the bankruptcy where you can still cover your current operating expenses but have no money left for you long term obligations such as loan repayments, pension funding, supplier payments and other long term obligations. This is what most airlines have filed for, to reorganize their obligations.

   If the situation is bad, stop and fix it before it gets worse.
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redflyer
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 8:43 pm

Quoting BMI727 (Reply 14):
Quoting Lufthansa (Reply 12):
You're not looking at the effect on the entire market place, just the welfare of an exiting company and its stakeholders.

The only way for a company to get a second chance via Chapter 11 is for the stakeholders to agree to give it one.

The "stakeholders" are usually secured creditors. The investors usually have a secured stake in the organization, and Chapter 11 is geared towards allowing those stakeholders the latitude to keep the ailing organization alive so that they can recoup their losses. But in all of this no one ever addresses the interests of the unsecured creditors, which are often times (not always) the smaller entities that will incur a huge financial impact when their outstanding invoices (pre-BK) go unpaid and wipe them out. The secured creditors tend to be of the institutional variety and can usually weather the loss of their investment in the ailing organization. But no one ever thinks about the small unsecured creditors who are wiped out, or left in a lurch for many years while they recover. This is where the BK laws come up short.

Quoting rfields5421 (Reply 19):
Ch 11 in the US has become a management restructing tool. An acceptable method of shedding company responsibilities rather than actually making the company deal with its obligations.

Or deal with the consequences of its past (bad) decisions.

Quoting Cubsrule (Reply 20):
So in this "C11-less" alternate universe that some are proposing, we'd see management using C7 for the same purposes and creditors winding up getting paid even less.

Investors, by their nature, are risk takers. They invest in something knowing that the terms of the risks associated with that investment dictate they will recognize a windfall relative to other forms of capital building methodologies available to them. There is nothing wrong with stipulating that one of those risks entails losing the entire investment via Chapter 7 BK. If Chapter 7 were the only BK path available to an ailing organization then those investors would not be SOL, they would have simply structured the terms of their investment on the front end through a contractual stipulation - e.g., requiring the borrower/organization to always maintain a minimum cash position or debt ratio. Because of the availability of Chapter 11, secured creditors tend to be far more lax with their investment than they otherwise would be and take risks that they might otherwise not have. I'm not saying they are completely okay with the availability of Chapter 11 - BK is painful no matter what the path taken - but it certainly mitigates the risks to a certain point.
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 9:18 pm

Quoting Lufthansa (Reply 12):
It fosters a culture within an organisation that basically says "we'll all still have jobs we'll just go through the bankruptcy" which leads more extreme positions from things like union demands.

Well, there's a crock if I ever heard one. You might want to ask some airline employees that have gone thru bankruptcy and see what their take on this is. I doubt if you're going to get many that have that attitude.

In addition to that, let me ask you this......how does your theory hold up in DL's bankruptcy, being largely non-union? Nobody likes to see their company on the brink of folding or massive job losses.

BTW, DL got themselves in BK trouble, for the most part, because they were chasing market share BEFORE they ever filed for bankruptcy.
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 9:59 pm

Quoting rfields5421 (Reply 19):

Great post overall. Chapter 11 is indeed a get-out-of-jail card. It is free for management, and far from it for salaried workers, whose contracts get voided, or for shareholders.

Quoting rfields5421 (Reply 19):
The Ch 11 process dramatically increases our government debt and obligations as companies use it to shed obligations to their employees and foster them onto the American people.

Which is nothing but state aid...
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 11:08 pm

Quoting mayor (Reply 29):
Well, there's a crock if I ever heard one. You might want to ask some airline employees that have gone thru bankruptcy and see what their take on this is. I doubt if you're going to get many that have that attitude.

People working frontline jobs obviously wouldn't be thinking like this. But most of those people aren't aware of how fine the margins are on plenty of day to day activities, they are, after all, doing their job in an organisation and aren't primarily business people. Some of those jobs are highly skilled. Others are merely cleaning the bathrooms, but, they are all primarily focused on their job. Their union leaders are different. They only have a job while their members are still employed but they can of course play hard ball. And some of them do, knowing their will be some kind of 'recapitalisation'.
Likewise, Some management don't sit down and talk when they should, knowing if they can get out of their contracts in the bankruptcy process, they can stick it to that union leader. End of story.

This isn't an ideal situation. Both groups should be sitting down and trying to strike a sustainable deal and focus on the company's long term health.

Quoting tdscanuck (Reply 25):
How is it not a level playing field when all companies are operating under the same law?

It's the distortion of the market. Let's take two fictional carriers based at ORD. Say Airline A and Airline B. Both have a huge hub operation. A is a tight run ship, has good industrial relations, values its people and pays them fairly. B pays its people more, is a slightly larger carrier with a turbulent history, has higher costs through its work practices both in terms of staffing per aircraft, turn around times, fleet utilisation practices but has traditionally been the business person's favourite. B see's A growing and doesn't like it, but because A is well run, its got better profit margins. Carrier A is growing at a slow and sustainable rate. B see's that and says enough is enough, draws a line in the sand, and doubles frequency on A's key routes. This has the unwanted effect of driving down yields by capacity dumping. Carrier A of course responds. It's worked hard to build up its routes. Yields go down to nothing. A increases its advertising spend, improves its lounges and takes on debt to do so. B has started pricing A's routes below cost, in an attempt to force them out of the market, but in doing so is losing more cash than A per flight as its costs are higher, but, It is subsidising this route from its flight to London which A does not have and B enjoys very good yields on. So B sustains the losses on this route for several years. A has managed to keep some of its market, but had to invest heavily in product upgrades at a time it wasn't making any money on the route which meant debt. This goes on for years. All of a sudden, B's staff point out they haven't had a pay rise in a few years. B's union leaders are determined to push for one. They start their campaign. B's management have absolutely zero intention of giving them one, pointing out they're already making a loss on the route, but they need to keep it for strategic reasons as they will lose a key frequent flyer base. B's staff threaten industrial action and effectively do get what they were asking for. Forcing B's cost differential up even further than A's. The game continues. Two new things happen. Oil prices creep up, and B finds a new British Airline competing with it on its london route. The key source of revenue allowing it to subsidise its fight with A.
A once again works hard with its staff, gets them to agree to a modest pay increase but explains at this point, this is all they can give as the situation has become extreme, however they know for a fact losses at B are far bigger so the market must change soon. They do. B runs out of cash.

So we get to the point where B runs out of cash. What should happen now? In a normal free market, if B can't find somebody to pump more money into it (unlikely if its making heavy losses) Then B can't refuel its plans, but A is still flying, albeit having taken on considerable debt to do so. B Stops flying, A then rapidly fills the gap by increasing its services and its yields immediately improve. They can' only improve so far, otherwise carrier C will set up down in shop. A is able to buy some of B's aircraft in a hurry, enabling them to expand. They even give some of their staff jobs. A is now the primary carrier there, and is now paying down its debt and enjoying healthy sustainable yeilds and its staff are onside. B is part of history. Lot's of B's former staff are working now at A. it took some adjusting, but they are now working at a financially sound entity, and one that is strong in its market, as the now dominate player. New carrier D is a LCC and comes along in a small presence, keeping prices in check but carrier A controls the majority of the market.

This is how a free market should work.

Or B gets "reorganised" in Chap 11. (obviously this happens before it runs out of cash but its well on the way)
It stays in the market place. It's staff have a put cut forced upon them, worse than what those over at A are on. They are naturally disgruntled. A is still barely making any money, but taking on debt in an attempt to keep its market. B however now has some of its price issues under control, but yields are still trash. The blood bath continues, except this time, now B now has an ability to stick it back to A. A has tried its best to engage in sustainable practices, but, B, now it has lower costs is dropping prices and winning back market share. A Starts to lose money and can now no longer take on debt for product upgrades. A starts to look tired, not as good as it once was, it needs to raise prices to compete, but if it does that B will take the market. A is left heavily indebted and making loses.. and it's time for Chap 11 for itself.

See the pattern? These laws stop the equilibrium that would naturally happen as part of the free market happening.
 
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RE: Airline Bankruptcies In Europe Vs North America

Mon Nov 19, 2012 11:29 pm

Quoting redflyer (Reply 28):
But in all of this no one ever addresses the interests of the unsecured creditors, which are often times (not always) the smaller entities that will incur a huge financial impact when their outstanding invoices (pre-BK) go unpaid and wipe them out.

Of course, in such a case, they end up no differently than they would in a liquidation.

Quoting redflyer (Reply 28):
There is nothing wrong with stipulating that one of those risks entails losing the entire investment via Chapter 7 BK.

That risk exists. That's exactly what happens if you cannot come up with a viable plan for reorganization.

Chapter 11 does not in any way keep companies from failing. If that's the intent, it's a massive failure. It gives the chance for the private entities involved with the business to fix problems before it truly fails, which sometimes succeeds and sometimes doesn't.

Quoting mayor (Reply 29):
Well, there's a crock if I ever heard one. You might want to ask some airline employees that have gone thru bankruptcy and see what their take on this is. I doubt if you're going to get many that have that attitude.

Certainly not, but bankruptcy proceedings usually leave them better off than the alternative.

Quoting Lufthansa (Reply 31):
See the pattern?

Yeah, airline A is dumb for not realizing that the market is price driven rather than product driven and sunk a bunch of money into upgrades that rather than bringing costs into line to compete more effectively. That's basically the story of the American airline industry post 1978 and especially post 2000 or so. How much money did AA burn through trying to compete without bringing their costs down?
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 12:28 am

Thank you! You have just proven my point, the market hasn't been allowed to reach equilibrium. Hence why the cycle goes on. This is how it distorts the market.
 
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 12:32 am

Quoting brilondon (Reply 24):
In Canada there is bankruptcy and then there is an instrument where by companies can reorganize their obligations and negotiate more favourable terms to help them through the cash shortage. It use to be called the CCRA but it has been updated and the name has changed.

OK, I am back. The instrument I was thinking about is the Bankruptcy and Insolvency Act which is similar to the Chapter 11 Bankruptcy.
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 4:38 am

Quoting brilondon (Reply 24):
It use to be called the CCRA but it has been updated and the name has changed.

I believe it's called CCAA, or Company Creditors Arrangement Act.
 
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 5:32 am

Considering that we're talking about bankruptcy in the U.S., how has any of the majors filing bankruptcy affected, negatively, any of the other majors, especially considering that they've ALL filed at one time or another, except WN and considering that they're making money, hand over fist, I don't believe it's affecting them, either.


HOW has the ability to file Chapter 11, in the U.S. affected the other airlines in the U.S.? Don't forget, they've ALL done it, now.......not counting B6, AS, NK, VX, etc.
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 6:52 am

Quoting Lufthansa (Reply 31):

Very good explanation of how the market works. However, explain how the chapter 11 changes things? The equilibrium that you describe occurs both with Chapter 11 and without it. in your first senario there are thousands of employees that loose their jobs. In the second senario there are more employees yes but instead of loosing their jobs they simply take a pay cut.

Second, how would you have brought costs inline with unions at your company?

Quoting rfields5421 (Reply 19):
The Ch 11 process dramatically increases our government debt and obligations as companies use it to shed obligations to their employees and foster them onto the American people.

Explain how any federal government debt is increased by Chapter 11 fillings of a corporation.
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 7:19 am

Quoting Lufthansa (Reply 33):
You have just proven my point, the market hasn't been allowed to reach equilibrium.

The only equilibrium the airline market ever had was the artificial one created by government regulation prior to 1978.
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 1:17 pm

Quoting mpdpilot (Reply 37):
Explain how any federal government debt is increased by Chapter 11 fillings of a corporation.

Fees and such owed to the federal government by the airline are unsecured debts, which have been written off in the recent airline bankruptcies.

Airline employees who lose their jobs are eligible for federally funded extended unemployment benefits.

Airline employees who lose their jobs may qualify for federally funded job retaining programs.

Airline employees who lose their jobs often qualify for food stamps after primary separation benefits run out.

Airline employees who lose their jobs and/or medical insurance can qualify for Medicaid if they have children. Even if they do not, they join the uninsured pool, which is a big drain on local, state and federal government which have to fund ER care at public hospitals across the nation.

Airline pensions which are turned over to the Pension Benefit Guaranty Board have never been fully funded at the reduced levels. The PBGB obligations to pay out are near the level of the obligations to pay out Social Security, with substantially fewer assets to fund those payments. The US taxpayers are responsible for any payments the PBGB cannot fund from assumed pension plans and contributions from participating companies.
 
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 1:30 pm

Quoting 9252fly (Reply 35):
I believe it's called CCAA, or Company Creditors Arrangement Act.

Yeah, that's the one. Thanks. I was also thinking about the Bankruptcy and Insolvency act which is similar to Chapter 7 in the US.
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 1:35 pm

Quoting mayor (Reply 36):
Considering that we're talking about bankruptcy in the U.S., how has any of the majors filing bankruptcy affected, negatively, any of the other majors, especially considering that they've ALL filed at one time or another, except WN and considering that they're making money, hand over fist, I don't believe it's affecting them, either.

The argument is that if some of the majors had gone through Ch 7, rather than Ch 11, the surviving carriers wouldn't have also been forced into Ch 11. In the case of WN, the argument (probably true) is that they would have made a lot more money without competing with carriers protected by Ch 11, enabling them to grow more and displace less efficient carriers from the market.

Quoting rfields5421 (Reply 39):
Fees and such owed to the federal government by the airline are unsecured debts, which have been written off in the recent airline bankruptcies.

That gets worse under Ch 7, not better. Ch 11 gives them a fighting chance to repay at least some of those debts.

Quoting rfields5421 (Reply 39):
Airline employees who lose their jobs are eligible for federally funded extended unemployment benefits.

Airline employees who lose their jobs may qualify for federally funded job retaining programs.

Airline employees who lose their jobs often qualify for food stamps after primary separation benefits run out.

Airline employees who lose their jobs and/or medical insurance can qualify for Medicaid if they have children.

Airline employees would be eligible for all these benefits under any job loss, whether Ch 7 or 11. Ch 11 lays *less* people off, resulting in *less* federal government obligation under the above programs, not more.

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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 3:24 pm

Quoting flyingalex (Reply 9):
The difference lies in the different bankruptcy laws in the US and in Europe.

In the US, there are two "kinds" of bankrupt, one under Chapter 7 and one under Chapter 11 of the bankruptcy code. The latter means you're given some time to try and fix things, and that you can renege on all sorts of agreements with your previous creditors (which is how a lot of US airlines managed to ditch their union contracts and pension liabilities). The former means your company gets liquidated.

European bankruptcy laws don't really provide a Chapter 11 equivalent. If you file for bankruptcy over here, your company is very likely finished. That doesn't mean that there won't be anyone who picks up the company's assets and continues the business, but the original entity is usually toast.

I can't speak for the rest of Europe, but here in the UK there are usually four routes for a company in trouble:

The 1st is a "Company Voluntary Arrangement" (CVA) With a CVA all the creditors are offered a deal where they get a % of their debts paid, either immediately or in stages. This has to be agreed by a very high percentage of the creditors in order to proceed. The advantage for both parties is that the company continues to trade and the creditors have a firm idea of what they will be getting, plus there's no huge fees from the accountants for closing the business down and lossed from selling stock for silly money.

The 2nd is called a "pre pack" The owners set up a new company often with a similar name to the existing one, reach an agreement with a firm of insolvency experts to buy the good assets from the existing failing company, then when its all agreed they send the 1st company into administration, the insolvency people sell them the good bits for a fee which coverts their expenses, and the they write and tell the creditors "there's nothing left for you"
Usually in these cases, the company continues to run from the same premises, with the same staff, same vehicles, same computers etc. As an example you could supply them with a new phone system which they don't pay for. When you ring them up to ask for the money, they answer on your phone and tell you that they've bought it for pennies from the liquidator, and tell you to take a running jump.

This option really is a cynical way to do business and IMO should be outlawed.

The 3rd is administration, the insolvency experts take control of the business, continue to run it, maybe shutting down hopeless parts and sell off the remainder, shareholders are wiped out, creditors get whats left after the administrators and the secured creditors take whats owed to them.

The 4th is bankruptcy, its all shut down and sold off. As long as the insolvency people cover their fees they don't seem care too much about anyone else, most business people seem to have stories of bankruptcys where the insolvency people either totally lost assets or sold them off too cheaply.

Thus you can see that we do have schemes similar to Ch 11, its just that they are not called bankruptcy.

The equivalant of Ch11 is probably less prevalent here in the UK than the US as companies don't generraly have the crippling health care costs and such like that burden many long standing US businesses, who can find that Ch11 is the only way to get labour costs to a competitive level.

Presently in the UK we are seeing a lot of shop chains heading down the equivalant of Ch11, they are burdened by high rents for shops which they signed at the top of the market so the solution is administration and then tell the landlords, "you either take a reduced rent or we surrender the lease".
 
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 3:29 pm

Quoting BMI727 (Reply 32):
Quoting redflyer (Reply 28):
There is nothing wrong with stipulating that one of those risks entails losing the entire investment via Chapter 7 BK.

That risk exists. That's exactly what happens if you cannot come up with a viable plan for reorganization.
Quoting BMI727 (Reply 32):
Chapter 11 does not in any way keep companies from failing. If that's the intent, it's a massive failure. It gives the chance for the private entities involved with the business to fix problems before it truly fails, which sometimes succeeds and sometimes doesn't.

But the whole point of Chapter 11 is to "protect" the defaulting organization long enough to see if it can come up with a viable plan. Unfortunately - and my whole argument around this - is that it protects the organization in an artificial manner. It would be better, in my opinion, to let the organization default and go into liquidation. That way every entity that is impacted, from suppliers to creditors, would be treated the same. Chapter 11 does create a distortion by making some entities bear the brunt as if the defaulting organization had in fact gone into Chapter 7 whereas other entities get a shot at redemption.

Allowing for liquidation is not a bad thing. In a free market system nothing ever really goes away...it just gets redistributed and becomes more efficient in the process. Look at every company that has liquidated. Its assets are acquired by other companies and put to good use. A large portion of the work force is also acquired as well as part of those assets in order to run them. The only thing that truly goes away is the brand. In the case of airlines, if you look at some of the ones that went into CH 7, what happened to the assets and the people? They got picked up by other carriers. It's not as if someone came through with a blowtorch and burned everything to the ground.  
Quoting mayor (Reply 36):
Considering that we're talking about bankruptcy in the U.S., how has any of the majors filing bankruptcy affected, negatively, any of the other majors, especially considering that they've ALL filed at one time or another, except WN and considering that they're making money, hand over fist, I don't believe it's affecting them, either.


HOW has the ability to file Chapter 11, in the U.S. affected the other airlines in the U.S.? Don't forget, they've ALL done it, now.......not counting B6, AS, NK, VX, etc.

As far as the major carriers are concerned, as soon as one went into BK protection, then it got a leg up on the competition. By way of example, when UA went into BK back in the early 2000's, when it emerged it was far leaner and more profitable because it was allowed to shed its liabilities, which were driving its high costs pre-BK. That put pressure on the other majors because they were now at a disadvantage. Eventually they followed suit. AA was the last one and if you had read what analysts were saying in the few years prior to its BK filing in 2011, they were all saying that it had to go through BK in order to stay competitive. Mind you, they weren't saying it had to go through BK because it just couldn't stay afloat financially. They were saying it had to go through BK in order to stay competitive.

So, to Lufthansa's point in his posts, above, it does create a distortion. It is a means to legally breach contractual obligations in order to shed debt and become more competitive. Once that is done, if there are competitors that were in the same situation then they suddenly have a disadvantage. Why? Because a court of law ordered that the ailing organization could walk away from its debt obligations.

Is that fair?

I could be wrong, but in all of the posts on this thread I haven't seen anyone address what the harm is that would occur if all BK filings were required to result in liquidation. Maybe that would be a more interesting topic of discussion!
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 4:02 pm

Quoting Lufthansa (Reply 3):

Here is the problem AA is now going against DL which you call a well run company but they got that way thru BK, UA, and US to lesser extent all of which is their major competitors all went thru BK came out with less debt, wages below AA so how can you compete with them you have to go thru BK to lower your costs down.
 
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 4:15 pm

Quoting redflyer (Reply 43):
It would be better, in my opinion, to let the organization default and go into liquidation. That way every entity that is impacted, from suppliers to creditors, would be treated the same.

EVERY entity? Are the employees not impacted?

Quoting redflyer (Reply 43):
I could be wrong, but in all of the posts on this thread I haven't seen anyone address what the harm is that would occur if all BK filings were required to result in liquidation. Maybe that would be a more interesting topic of discussion!

The harm is what you've done to the employees you just put out of a job? Say, for instance, that DL was to go into liquidation. The pilots would probably either retire or try to hire on somewhere else (considering the pilot shortage), but all the others would have to try to hire on at other carriers (IF there were openings) or find work in some other industry. There's just not room out there for another 80,000 people, all of a sudden.

Even when PanAm went into liquidation, only part of their employees went over to DL when they acquired SOME of the assets. When Eastern folded, I'm sure some of them ended up at DL and other carriers, but that's just from them hiring on, there.
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 4:49 pm

Quoting mayor (Reply 45):
Quoting redflyer (Reply 43):
It would be better, in my opinion, to let the organization default and go into liquidation. That way every entity that is impacted, from suppliers to creditors, would be treated the same.

EVERY entity? Are the employees not impacted?

Of course employees are impacted. But, believe it or not, they probably fare better than creditors and suppliers do. Employees will find work with other carriers/companies with minimal impact (relatively speaking - I am NOT diminishing the emotional toll these things will take). Usually in a BK liquidation the employees will find work with other organizations, often times the very ones that pick up the liquidated organization's assets and/or market share.

Quoting mayor (Reply 45):
Quoting redflyer (Reply 43):
I could be wrong, but in all of the posts on this thread I haven't seen anyone address what the harm is that would occur if all BK filings were required to result in liquidation. Maybe that would be a more interesting topic of discussion!

The harm is what you've done to the employees you just put out of a job? Say, for instance, that DL was to go into liquidation. The pilots would probably either retire or try to hire on somewhere else (considering the pilot shortage), but all the others would have to try to hire on at other carriers (IF there were openings) or find work in some other industry. There's just not room out there for another 80,000 people, all of a sudden.

They are out of a job only for the liquidated organization. The organization(s) that pick up the liquidated company's assets and/or market share will usually pick up the employees as well. If the market is there, they WILL find employment in the same industry. If the market is NOT there, well then, that just goes to show the impracticality of propping up an ailing company. And if you guarantee employment in a non-existent market then that is not a free market system.

In a free market system everything should be able to stand financially on its own merits. Any mechanism that protects an organization from the winds and shifting tides of the market is only distorting that market.
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 5:04 pm

Quoting tdscanuck (Reply 41):
Airline employees would be eligible for all these benefits under any job loss, whether Ch 7 or 11. Ch 11 lays *less* people off, resulting in *less* federal government obligation under the above programs, not more.

The difference is that under Chapter 7 the management who run the company into the ground lose their jobs, their severance pay, their health insurance, etc. just like everybody else. While with Chapter 11, those same people who run the company into the ground conserve pay, benefits, bonuses and what not, while everybody else (lower employees, shareholders, creditors and tax payers) share the pain.

Also under Chapter 7, a company badly run disappears, and only the fittest companies survive. Under Chapter 11, however, the weaklings return having shed a ton of liability, and ready to start back again with an unfair competitive advantage with respect to those companies that pay off all their debts, thereby preventing evolution from performing its magic...
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 5:19 pm

Quoting UALWN (Reply 47):
The difference is that under Chapter 7 the management who run the company into the ground lose their jobs, their severance pay, their health insurance, etc. just like everybody else. While with Chapter 11, those same people who run the company into the ground conserve pay, benefits, bonuses and what not, while everybody else (lower employees, shareholders, creditors and tax payers) share the pain.

I've never heard of any Ch.11 where management took *no* hit. If nothing else, especially in the US, upper management holds a lot of stock and stock options, which is typically rendered worthless during the Ch. 11 process.

And the share of pain under Ch.11 for "everyone else" is at least less pain than under Ch. 7.

The undertone seems to be that you don't like how management comes through Ch. 11, not the concept itself. Is that the core issue?

Tom.
 
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RE: Airline Bankruptcies In Europe Vs North America

Tue Nov 20, 2012 5:25 pm

Quoting tdscanuck (Reply 48):
The undertone seems to be that you don't like how management comes through Ch. 11, not the concept itself. Is that the core issue?

This is one of them. But see also my second paragraph above, about the unfair competitive advantage afforded to those companies who are allowed to come back after Ch. 11.
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