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N.Y. Bankruptcy Court Judge Says Northwest Airlines May Return Aircraft It Is Leasingfly4ever said:JT8D,
I hate to burst yours and Steveair's bubbles but leases are not "pulled" under bankruptcy. With permission of the judge, which NWA has for the first 108 so far, the leases can be "rejected". This has the effect of allowing NWA to re-negotiate lease rates on whatever airplanes it wants to hang onto. Without this motion and grant by the judge the lease holder is under no obligation to negotiate better rates.
fly4ever said:JT8D,
I appreciate your response but your understanding of the legal route that an entity must take in order to improve its financial picture is a little thin. I did state that they were given the right to "reject" the leases but there is far more to it than just that statement.
Bankruptcies always start out with standard motions which enable the company to reduce its payout. It doesn't matter which industry you're talking about.
Lease charges and length of term are the two biggest issues facing NW right now and if they were to going to reduce their fleet you would have seen lease holders for 108 airplanes already get their 5-day notice. It may happen to some of the planes but it won't happen to 208. NWA will not take the chance on losing such a huge part of their market share by shrinking their fleet overnight.
Lease holders will be dealing with NWA (probably already are) so that they don't have to hold the bag on a bunch of airplanes with limited options for placing them. NWA will negotiate better rates and shorter terms for the purpose of being able to park aircraft as new and more efficient aircraft are brought on board.
Ace McCoy said:And yes we are furloughing 100+ guys and it sucks.