Bankruptcy for a Two Year Old

[lowecur]

Your a real bright guy lowecur, you seem to have a serious selfesteem problem. I do, thanks for talkin to me. I guess based on your definition of prudent, the sign of the times during the hitler era were quiet prudent as well eh? Well if you were German, you followed or where shot. Now, if you have a typical pilot' mentality and look out for number one, you would have done just fine. Just a little lesson for you wanna be management type, prudent has nothing to do with the sign of time, the prudent thing to do is irrespective of the time, it's the prudent thing during good or bad times. So according to you it's prudent to cut your on throat because everyone else is doing it? Yes, provided you need to do it to survive. Like I said before, you must have a severe selfesteem problem to be such a crowd follower.

You sure like to repeat yourself. Perhaps some speech therapy would help.

 

[FlyBoeingJets]

This doesn't completely answer your question but is a start. BK will be expensive even though leases will be renegotiated to save money. UAL has spent big bucks in BK. But they gave away their pensions and cut wages to the bone. Work rules also suffered. UAL is now going to come out of BK with less debt than Delta has. I see great things in UAL's future. Not sure about Delta. Someone on this board said Delta might buy UAL. I see UAL being able to buy Delta or Delta assets. Or maybe Airtran could buy a major with Wall street's help.

BTW General, if you are listening, just because UAL and USAir were allowed to survive in BK and are coming out it doesn't mean DAL will be afforded the same opportunity. We are in different times now. Oil is high and financing may not be rolling in to help Delta. Delta could be the first chapter 7.
I view BK as a chance for management to gain great flexibility in dealing with labor (very bad) but they risk someone taking over the company if the courts feel they have a better plan. I wonder if the PBGC will survive these 2 BK's. Or how much equity and money Delta will be forced to give to the PBGC to give up the pensions. I wonder how much downsizing is about to occur for NWA and DAL. UAL and USAir both downsized in BK. Don't know why that is necessary but it seems to be the standard.


Airline pensions underfunded by $16.3B
PBGC on the hook for $11.2 billion http://www.marketwatch.com/1.gif By Rex Nutting, MarketWatch
Last Update: 12:16 PM ET Sept. 15, 2005 E-mail it | Print | Alert | Reprint | [url="http://www.marketwatch.com/images/rss.gif"]http://www.marketwatch.com/images/rss.gif[/url]WASHINGTON (MarketWatch) - The employee pension plans of two major airlines that declared bankruptcy Wednesday are underfunded by a total of $16.3 billion, the federal Pension Benefit Guaranty Corp. said Thursday.

The federal agency, which serves as a safety net for defined pension plans, could be on the hook for $11.2 billion, while employees stand to lose a total of $5.1 billion, the agency estimated Thursday.
Delta Airlines' (DAL: news, chart, profile) pensions are currently underfunded by $10.6 billion, the PBGC said. Employees could lose $2.2 billion, while the PBGC could pick up $8.4 billion, the largest single claim in the 31-year history of the pension agency.

Northwest Airlines' (NWAC: news, chart, profile) pensions are underfunded by an estimated $5.7 billion, with employees standing to lose $2.9 billion and the PBGC losing $2.8 billion.

The PBGC pays pension benefits up to a certain level when it takes over a plan, which could leave some employees losing promised benefits.

Until the bankruptcy court, the PBGC and the airlines reach an agreement on the pension plans, the airlines are obligated to continue funding the plans, the head of the federal pension agency said Thursday.

"The financial challenges facing the airline industry are significant, but nothing in the bankruptcy code requires companies to skip their pension funding payments," said Bradley Belt, executive director of the PBGC.

The PBGC is funded by premiums on companies that offer employee defined benefit pension plans.

The PBGC has estimated that airline pensions are underfunded by more than $28 billion. The agency has picked up $6.6 billion in obligations from the pension plans of bankrupt United Airlines

 

[AA717driver]

The very first thing you do in Ch.11 is to protect the severance and retirement packages of your top executives. Gotta keep the talent from bolting...

The whole process is a sham. The stockholders get hosed. Wall St. gets protected. The taxpayers are on the hook for the pensions. Business as usual.TC

 

[Lear70]

Ch. 11 in a nutshell.

1. Get to stop making payments to vendors, but they still have to keep servicing you.

2. Get to renegotiate ALL contracts at DRASTICALLY lower rates. Refuse to negotiate and the bankruptcy judge can simply throw your contract out and you get nothing then company goes to Vendor B.

3. Get to get rid of any airplane you don't want that has become too expensive to fly for fuel, mx, lease payment costs, whatever.

4. Have a bankruptcy judge re-do every single employee contract to "industry standard" (which keeps lowering every time an airline files), throw out pensions, medical retiree benefits, everything, and you get no say-so. You DO have the right to immediately strike, but that usually spells the end of the airline and people are too big into self-preservation for that.

5. Stay in bankruptcy just about as long as you d*mn well want.

That's why both carriers rushed to file before Oct 17 - the new laws don't allow NEAR this type of flexibility. At least we've fixed that. Now if we could only get pension reform and some type of law that REQUIRES airlines to quit pricing their product BELOW what it costs to produce it and we'd be in a much better situation, but Lowecur is about to tell me why the government not only won't, but CAN'T do that.

 

[h25b]

Now if we could only get pension reform and some type of law that REQUIRES airlines to quit pricing their product BELOW what it costs to produce it and we'd be in a much better situation, but Lowecur is about to tell me why the government not only won't, but CAN'T do that.

I don't think you'd want that law either... That would start the process of liquidations.

 

[Lear70]

Have you considered that possibly what the industry NEEDS is for an airline or two to LIQUIDATE, thereby lowering the number of available seats.

There certainly is NO OTHER way to get the industry back on its feet again - seat prices HAVE to come up again and ALL the airline's management have proven they will not do that of their own volition.