Chapter 11 welfare

[saltyswede]

Chapter 11 is like welfare for airline it's hard to go back to work if you don't have to pay your bills.

 

[rvsm410]

One of my main points in other threads

Chapter 11 is like welfare for airline it's hard to go back to work if you don't have to pay your bills.

This is one of many reasons I feel the government needs to return to regulating a basis profit margin back into ALL airfares.....what's the difference, we will either pay a bit more for a ticket, or we will pay as a nation through the Bankruptcy courts....

How would this be done? The Government would study the average costs to operate every aircraft certified to fly in the US, they would do the same for the everyones salarys based on aircraft type, senority and the industry standard benefit packages....to include retirements as well.....the cost of fuels would be a variable based on current markets.....After all is said and done, then a marginal profit is added, like 5%.
Now all the carriers would now be working IN THE BLACK.....any extra services folks wanted would be paid for al la cart during ticketing, or the airline as a whole could add other services in general that would seperate them from other airlines for which those customers would pay for. Still this carier would be guaranteed a minimal profit.

ALL THIS WOULD BE BASED ON AN AVERAGE COST MODEL. Companies that were to high or have unexpected troubles due to mismanagement would suffer a sub par income quarter or year....Effectively managed companies would make money, the employees would be paid fairly, the stockholders would be happy, the ecomomy would grow. Those folks that want the $99 ticket would be able to do so by ground transportation, or just save a little more each year for that Disney vacation.....Oh well!

I dont know, I am not an economist, but maybe this is just a start of an idea, This industry is to important to the economy in the form of mass transit, employment and countries overall business health. I think the government must step in to establish a baseline of operational costs passed on in ticket prices.

Maybe I am nuts, but if everyone in the industry is getting their compensation an benefits cut and adjusted now, it seems now is the time for some government action as well instead of throwing good money at porly run airlines like the ATSB did.

 

[GogglesPisano]

If you ask the average American (the ones who pay taxes and vote) they will generally think, because prices have never been lower, that there is nothing wrong with the airline industry.

And they are right. Most shareholders are losing their investments, most employees are losing their benefits and retirement, but most economists will tell you that since the consumers are benefitting from increased competetion and lower fares the market is working.

Chapter 11 does allow an airline to reap an unfair advantage, however.

The last thing we need is reregulation (and it is extremely unlikely to happen anyway with the mood if government over the past few decades.) Allow the market to work.

 

[JohnDoe]

quote:
"Chapter 11 does allow an airline to reap an unfair advantage, however."


I agree. I have to laugh everytime I see somebody mention our supposed "free-market economy." When companies are allowed to "hide" in chapter 11 protection for years, there is no free-market at work.

 

[satpak77]

Amen

AMEN to the first post

I also disagree with Airbus under-cutting Boeing, while at the same time Airbus is subsidized/supported by French government

but thats a topic for another day

 

[skykid]

Chapter 11 is like welfare for airline it's hard to go back to work if you don't have to pay your bills.

salty, for clarification, how about being specific on which bills get to go unpaid. That way we can compare this to the added expenses in CH11, and have an educated idea on the net value of the welfare you are talking about. Of course you know which bills get to go unpaid, right?

 

[kevdog]

I also disagree with Airbus under-cutting Boeing, while at the same time Airbus is subsidized/supported by French government

but thats a topic for another day

And Boeing never got a penny from our government? How about the B-52, KC-135 as an example? I like Boeing over Airbus, but it might be a LONG, LONG time before Boeing outsells the Europeans and takes the lead again.

 

[satpak77]

And Boeing never got a penny from our government? How about the B-52, KC-135 as an example? I like Boeing over Airbus, but it might be a LONG, LONG time before Boeing outsells the Europeans and takes the lead again.

Airbus is not trying to sell bombers to Pentagon

what gets me is that JetBlue, Frontier, others, boast about the "great deals" that Airbus is cutting. No sh1t shirlock, I wonder why.

As far as welfare, we need to limit how many times an airline can go Ch.11.

This was established for bonafide, legit purposes, not as a way to excuse mismanagement. US Airways is in Ch.11 for the second time. US Airways has approximately 32,000 employees working for them right now. If each one not only worked for FREE this year, but DONATED $100,000 back to US Airways, that would be $32,000,000 back to the company.

US Airways has publicly come out and asked for $1 BILLION in cost savings several times. That is 1000 million folks. So even if EVERY SINGLE EMPLOYEE forgave next years salary, from the mail room clerk to the senior captain, AND donated $100,000 back to his company, US Airways still needs to pull sub-1 billion from a magic drawer somewhere in the CEO's office.

enought venting

later

 

[NewBlue]

Check your math. You are off by a factor or two.

 

[satpak77]

Enron math

missing a zero, thats called "Agressive accounting" by Ken Lay

stike my "all 32,000 employees donate 100 grand comment" and change it to "every single employee works for FREE" and you still have the same situation

the point remains the same. Ch.11 should be a BUSINESS TOOL, for BUSINESS reasons, not an hidey-hole for poor managers to run to when the company is destroyed by their incompetence

later

 

[Dizel8]

" I also disagree with Airbus under-cutting Boeing, while at the same time Airbus is subsidized/supported by French government"

Charlene Druyen!

Now the goverment is about to start another inquiry into the dealings with Boeing about being over charged on quite a few different contracts.

At the end of the day, all propaganda aside, neither Boeing nor Airbus can probably claim the high horse. But it sure is fun pointing fingers....