Allowing Bk Carriers To Destroy The Industry

[C54Capt]

N by NW,
Unfortunately Busdrvr is right regarding the condition of UAL and NWA. It is difficult to accuarately explain the business theory and dynamics including bankruptcy law in just a few sentences on a forum, but if UAL can emerge from BK, they will have shed all of their unsecured debt responsibilities and will have positioned themselves to compete (on a cost basis) with the LCCs. This will give UAL a great advantage over its traditional peer group (NWA, AA, CAL, DAL). Now then, what makes the most sense for UAL? Certainly they could take their new found fortune and spend it trying to dominate the low yield domestic market, but I don't think even Tilton is that stupid. No, UAL will target the big prize, the Pacific, and they will leave no stone unturned in their quest.

 

[North by Northwest]

How presumputous of you both. "It is difficult to accuarately explain the business theory and dynamics including bankruptcy law in just a few sentences on a forum, but "IF" UAL can emerge from BK, they will have shed all of their unsecured debt (don't bet on it)responsibilities" I assure you and Busdrv, my comprehension of Bankruptcy law is adequate enough not to base a future business model on ifs, maybe, hope so. Ual's secured debt is so massive that they are no where near the kind of revenue to survive outside of bankruptcy. The question is NOT the fantasy of what Ual is hoping to do when it emerges from Bankruptcy. The $57 BILLION dollar question is "IF" it can. Liquidation is a VERY real possibility for United Airlines...anyone who doesn't think so clearly does not have an understanding of Bankruptcy. Please allow me to share a few Bankruptcy facts for those under the bizzzare elusion that it is somehow beneficial for companies to enter Bankruptcy :Chapter 11 bankruptcy allows a business to reorganize and refinance to be able to prevent final insolvency. Often there is no trustee, but a "debtor in possession," and considerable time to present a plan of reorganization. Sometimes this works, but often it is just a bottomless pit of more debt and delay. The final plan often requires creditors to take only a small percentage of the debts due (what is owed them) or to take payment over a long period of time. Protection of the public interestIn applying sections 1166, 1167, 1169, 1170, 1171, 1172, 1173, and 1174 of this title, the court and the trustee shall consider the public interest in addition to the interests of the debtor, creditors, and equity security holders.
Priority claims(a) There shall be paid as an administrative expense any claim of an individual or of the personal representative of a deceased individual against the debtor or the estate, for personal injury to or death of such individual arising out of the operation of the debtor or the estate, whether such claim arose before or after the commencement of the case.
(B) Any unsecured claim against the debtor that would have been entitled to priority if a receiver in equity of the property of the debtor had been appointed by a Federal court on the date of the order for relief under this title shall be entitled to the same priority in the case under this chapter.
Confirmation of plan
(a) The court shall confirm a plan if—
(1) the applicable requirements of section 1129 of this title have been met;
(2) each creditor or equity security holder will receive or retain under the plan property of a value, as of the effective date of the plan, that is not less than the value of property that each such creditor or equity security holder would so receive or retain if all of the operating railroad lines of the debtor were sold, and the proceeds of such sale, and the other property of the estate, were distributed under chapter 7 of this title on such date;
(3) in light of the debtor’s past earnings and the probable prospective earnings of the reorganized debtor, there will be adequate coverage by such prospective earnings of any fixed charges, such as interest on debt, amortization of funded debt, and rent for leased railroads, provided for by the plan; and
(4) the plan is consistent with the public interest.
Liquidation n request of a party in interest and after notice and a hearing, the court may, or, if a plan has not been confirmed under section 1173 of this title before five years after the date of the order for relief, the court shall, order the trustee to cease the debtor’s operation and to collect and reduce to money all of the property of the estate in the same manner as if the case were a case under chapter 7 of this title. End of story.

 

[North by Northwest]

Fly:"And I'm sure 10 years ago, that's exactly what you would have said about CAL....now look at them" Not to dash your hopes but the ONLY reason CAL is around today is because of the assets of Eastern Airlines. Period.

 

[Busdrvr]

http://biz.yahoo.com/ap/050408/northwest_moody_s.html?.v=1


NEW YORK (AP) -- Credit-rating agency Moody's Investors Service on Friday said it is reviewing Northwest Airlines Corp. and Northwest Airlines Inc.'s long-term debt ratings for a possible downgrade, citing troubled finances and a poor outlook for the airline industry.
Moody's said its review was prompted by Northwest's ongoing string of losses and negative cash flow, as well as expectations for difficult industry conditions to continue in the near term.

Yeah, you got it all figured out....

 

[aafsc]

Fly:"And I'm sure 10 years ago, that's exactly what you would have said about CAL....now look at them" Not to dash your hopes but the ONLY reason CAL is around today is because of the assets of Eastern Airlines. Period.

[post="261336"][/post]​

You don't know how right you are. I was there when Lorenzo sucked the lifeblood out of EAL.

 

[North by Northwest]

"citing troubled finances and a poor outlook for the airline industry" What does that mean for those that can't get out of BANKRUPTCY? Tick Tock....

 

[Busdrvr]

"citing troubled finances and a poor outlook for the airline industry" What does that mean for those that can't get out of BANKRUPTCY? Tick Tock....

[post="261377"][/post]​

UAL has DIP financing lined up, do you?

 

[North by Northwest]

NWA is not BANKRUPT, are you? Ual only has 2 years left to milk Bankruptcy. Then it is FORCED liquidation.

 

[Borescope]

You've hit the nail on the head Fly. It's the old saying "What goes around..........". I'd be willing to bet that 4 years ago no one would have ever thought UA would file. So, now it's a waiting game to see who is next, because we're all on the same ship. <_<

 

[Bigsky]

How about just asking for permanant Chap 11 protection and cut to the chase

Reuters
UAL Asks for Time for Reorganization Plan
Saturday April 9, 12:06 pm ET


CHICAGO (Reuters) - UAL Corp. (OTC BB:UALAQ.OB - News), parent of bankrupt United Airlines, has asked a federal bankruptcy court for another two months to file its bankruptcy reorganization plan without interference from other parties.
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In documents filed with the court on Friday UAL asked for an extension of the so-called exclusivity period through July 1. The current exclusivity period is due to expire April 30.

The No. 2 U.S. carrier, in bankruptcy since December 2002, has been given previous extensions.

"An extension of the exclusive periods will enable United to continue its hard work and implement many of its restructuring initiatives," UAL said in the documents.

United, along with the rest of the industry, has been battered by soaring fuel costs, weak revenue and competition from low-cost rivals.

Also on Friday, the union representing the carrier's flight attendants said UAL's management is "refusing to meet the same rigorous standards that employees are held to." The Association of Flight Attendants warned the airline that it would terminate its collective bargaining agreement in 20 days if it did not fix the problem.

The flight attendants in January ratified a five-year labor deal that would save the airline $131 million annually. The deal cut employee wages by 9.5 percent.

As part of its agreement with UAL, the AFA retained the right to audit the company's numbers to ensure that employee sacrifices were equitable.

"It's completely absurd that we wouldn't be meeting our cost savings target on any level," UAL spokeswoman Jean Medina said. "We still need a significant amount of labor savings."

The airline has said it needs to secure $725 million in annual labor savings to exit Chapter 11.

 

[North by Northwest]

"An extension of the exclusive periods will enable United to continue its hard work and implement many of its restructuring initiatives," UAL said in the documents.
"It's completely absurd that we wouldn't be meeting our cost savings target on any level," UAL spokeswoman Jean Medina said. "We still need a significant amount of labor savings." These people are on crack.

The airline has said it needs to secure $725 million in annual labor savings to exit Chapter 11. Dear God...will it ever end. How long will it be before these two drag the entire Industry into the pit of incompetence and eternal BANKRUPTCY. (How's that for outrage Ual-Tck? Better?)

 

[UAL_TECH]

"An extension of the exclusive periods will enable United to continue its hard work and implement many of its restructuring initiatives," UAL said in the documents.
"It's completely absurd that we wouldn't be meeting our cost savings target on any level," UAL spokeswoman Jean Medina said. "We still need a significant amount of labor savings." These people are on crack.

The airline has said it needs to secure $725 million in annual labor savings to exit Chapter 11. Dear God...will it ever end. The delima ... at what point do you just say NO MORE. . In all honesty it is tradgic that the employees of both companies have to deal with incompetence at the top piss there careers away...

[post="261505"][/post]​

Considering that '(almost) everyone' in the industry (including yourself) has capitulated in concessionary agreements to help send the pay and benefits of airline employees down the $hitter, I find your outrage amusing if not comical.

Prepare to be assimilated/capitulated/prostrated.

UT

 

[Bear96]

Getting nervous there, eh NxNW.

Speaking of incompetent ... by the way ... its D-I-L-E-M-M-A, T-R-A-G-I-C, and T-H-E-I-R.

 

[North by Northwest]

"Speaking of incompetent ... by the way ... its D-I-L-E-M-M-A, T-R-A-G-I-C, and T-H-E-I-R" Thanks School Marm...I'll slow down and pay EXTRA attention to MI SPEAKINS from heredy out. My mis-spelling is the product of powefull cranial obsfusions interloping at parsec velocity. No matter how nervous we get, it's eons from the knee knocking going on at your outfit. I most certainly am OUTRAGED! I am just apalled that I must get prepared for another round of paycuts to keep bad business plans alive at other carriers.

 

[Bigsky]

its D-I-L-E-M-M-A, T-R-A-G-I-C, and T-H-E-I-R

Hey Bear!! Don't forget the apostophe after the t in order to shorten up it is. So it is "it's" rather than "its." best of luck yksgib