Us And Ual Did Chapter 11

[700UW]

UAL cost cuts may tempt rivals to try Chapter 11
Sunday June 12, 1:49 pm ET
By Kyle Peterson

CHICAGO (Reuters) - After 2 1/2 years in bankruptcy, United Airlines is poised to emerge in the fall with an enviable cost structure that could tempt rival carriers to strive for similar cost cuts through court protection.

United, a unit of UAL Corp. (OTC BB:UALAQ.OB - News), has made the most of Chapter 11, reducing yearly costs by $7 billion. Much to the chagrin of its workers, the No. 2 U.S. carrier last month even managed to jettison its burdensome defined pension plans, generating annual savings of $645 million.

US Airways Group (OTC BB:UAIRQ.OB - News), also bankrupt, has won more than $1 billion in annual labor savings this year, an amount that might have been impossible outside of bankruptcy

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[ualdriver]

I'd think I'd probably be the first to recognize cutting 7B dollars in yearly costs at UAL, but unfortuately, that's not nearly the case. Considering our total operating expenses will run around 16B this year, that would be quite the feat. See what I mean about the media?

 

[WorldTraveler]

more importantly, there is nothing that airlines outside of bankruptcy cannot do that UA and US have done except for terminate pensions. AA and DL have done a better job of cutting costs across all aspects of their operation than has UA and yet they both still have defined pension plans. Even FlyI was able to dramatically restructure its business and reject leases outside of bankruptcy. And legal bills are alot smaller outside of bankruptcy.... among just a few advantages.