Chap 11 = State Aid so BA thinks.

[Rottweiller]

They kind of have a point here. Airlines overseas aren't bleeding to death like here in the US so where are we going wrong?

HONG KONG (AFX) - British Airways PLC (LSE: BAY.L - news - msgs) considers the US bankruptcy process to be the equivalent of state aid for US airlines, with the weaker carriers 'propped up' under creditor protection, the Financial Times reported on its website.

The report said BA believes bankruptcy shields troubled US airlines from costs other carriers need to shoulder. Such carriers are also disrupting the competitive landscape because their pricing practices are geared towards raising emergency cash, not making a profit.

The FT quoted BA chairman Martin Broughton as saying that in the US 'the walking dead' carriers, which had been forced to seek protection from their creditors, are being 'propped up by the palliative care of Chapter 11.'
United Airlines has been in Chapter 1l since December 2002, while US Airways revisited bankruptcy in September. ATA became the latest to file, in late October.

Rod Eddington, BA's chief executive, called Chapter 11 'state aid in another form... UAL is talking of walking away from its pensions obligations. We have increased our pensions commitments (in 2004) by 134 million pounds ($230 million US) a year.'

Eddington said several US airlines were 'pricing for cash' regardless of cost levels, and carriers in Chapter 11 are 'walking away from many obligations.'

 

[roadrunnerblue]

Totally correct!
How is it, that in a society where the 'rule of the fittest' is predominant, bad management gets rewarded with escape clauses like Ch.11.
But then isn't it also true that in that same society, where the eternal trial lawyer rules, it is never our fault, for there is always someone else te blame!

 

[JohnDoe]

No kidding.....

People bang the drum about capitalism, free-market economy, supply and demand, blah-blah-blah........yet companies are allowed to wallow in chap. 11 protection for years and years.

 

[canyonblue]

where the eternal trial lawyer rules

Who also make more money in Chapter 11, possibly the only ones that make out better.

 

[737tanker]

I heard USAir Capts complaining about the unfairness of Chapter 11 back when Eastern was in Chapter 11 and Eastern needed 110% load factor out of PIT to break even on the fares that they were charging. It does make for an uneven playing field when a Chapter 11 company has past bills erased and can set whatever price they want. They should have they fares no lower than the lowest fares of a non-Chapter 11 company

 

[nimtz]

Hi Pot, I'm Kettle

Yeah like BA wasn't handed a silver platter long ago on their long haul internationals from Heathrow. Talk about state aid. Piss off wanckers!

 

[Resume Writer]

Interesting how BA makes this claim. Most european carriers, (not saying BA) participate in a revenue sharing with all airlines that fly the same routes. They split the revenues no matter who carries the passengers. I remember this distinctly because when we calculated fare exchanges for internationally ticketed passengers, it was a total nightmare. Not sure if it is the same now, but it was in the early 1990's.

Kathy