Washington Post: DL & NWA to file by Sept

[lowecur]

I mentioned a while back that the new BK law to take effect on Oct 17th would force both of these carriers into Chapt 11. Looks like that may happen. DL needs to unload the twin sisters as the RJ is killing them, and NWA just has too many hard nosed employees to settle out of court.


2 airlines likely to file Chap. 11 in September

By The Washington Post | August 2, 2005

WASHINGTON -- Northwest and Delta Air Lines are likely to file for Chapter 11 bankruptcy protection in mid-September, a month before a more restrictive bankruptcy law goes into effect, bankruptcy experts and airline insiders say.

The airlines are expected to delay any action until around the Labor Day weekend to avoid distressing employees during the busy summer travel period.

Last week, Northwest reported a second-quarter loss of $225 million, compared with a loss of $182 million for the same quarter in 2004. The airline is trying to get its employees to agree to $1.1 billion in pay and benefit cuts. So far, it has secured cuts of about $265 million from its pilots and $35 million from its management and salaried workers. The carrier is losing about $4 million a day.

Douglas Steenland, Northwest's chief executive, has refused to speculate whether or when the airline would file for bankruptcy. But he said the new law taking effect Oct. 17 would be ''one of the factors" in the decision-making.

Delta chief executive Gerald Grinstein last week told employees the airline's efforts to cut about $5 billion were not enough. Delta posted a $382 million second-quarter loss. Delta was preparing to file for bankruptcy in October when pilots agreed to wage and benefit cuts of about $1 billion a year.

Congress passed the new bankruptcy law in April, in part to force companies to reorganize quicker and to bar them from paying retention bonuses, except if executives have proved they have job offers. ''Very often the same managers who got the company in trouble were . . . getting retention bonuses

 

[densoo]

The human eye cannot see the direction of the wind, but when the branches are bending and the leaves are whistling...........the wind is passing by.

The line pilot cannot see the direction of the company, but when the mortgage is due and the paycheck is dwindling...........the executives are taking their bonus.

 

[320AV8R]

It's in print....it must be true.

 

[TWA Dude]

...and NWA just has too many hard nosed employees to settle out of court.

Darn those "hard-nosed" employees ruining this industry. How dare they demand accountability and contract compliance from management.

 

[WillowRunVortex]

Darn those "hard-nosed" employees ruining this industry. How dare they demand accountability and contract compliance from management.

No sh_t! I hope the NWA Mechanics and the FA's stick to their guns till the bitter end. Obviously they have no support from their pilots who folded like a deck of cards for management.

 

[Inconceivable]

The pilots still have something worth keeping--a pension and scope. Something almost everyone else has pi$$ed away.

The mechs and FAs are both rocking some very weak, relatively new unions--both of which have eaten their young in the past four years. AMFA had been fighting for legitimacy until settling in 2001 and the FA union is only a few years old after voting out the teamsters. Both of these groups have given up work rules and protections in exchange for $$$ over the years. NWA pilots (in 2000) may not have been the best paid but certainly have had their six covered. Five years later, they aren't doing too bad by comparison.

 

[Pilottodd2]

You are right in saying the the pilots at NWA still have Pensions and Scope. Why else would NWA Managment be going into Ch. 11? That is EXACTLY what they will be targeting.

 

[320AV8R]

Obviously they have no support from their pilots who folded like a deck of cards for management.

Stupid pilots-

They should have held out for a 50% raise.

Retards.

 

[Workin'Stiff]

You are right in saying the the pilots at NWA still have Pensions and Scope. Why else would NWA Managment be going into Ch. 11? That is EXACTLY what they will be targeting.

Keep in mind that the pilots WILL NOT be the only group affected by this. The mechanics and FA's also have pensions. They stand to lose a lot in bankruptcy as do the pilots. However, it is extremetly short sighted to say that the penion and scope are the sole reasons that Chap 11 is in the future. That would be the case if you threw out fuel costs and the constant race to the bottom with fare structrues between the airlines.

 

[WillowRunVortex]

Stupid pilots-

They should have held out for a 50% raise.

Retards.

No,,,not a raise, but they didnt have to take the opposite line and say to management "what ever you say boss". You watch, management has them in check now. When they'r done with the other two groups they will go back to the pilots for some-more pillaging.

 

[General Lee]

IF there is ANY chance that we could go Chap 11 AFTER Oct 17th, I would rather us enter PRIOR to Oct 17th. Look at United. They have NO plan, and they just asked for another extension. Granted. They have been in Chap 11 for 32 months, and they are waiting it out. Also, it is better to go in when you have enough cash to get out. We have about $2 billion in cash, and a lot of that may have to go to the lawyers. We seem to have a plan at Delta, but we were late in implementing it. I am sure there will be some pay cuts, and maybe some scope changes. And, maybe, a merger.


Bye Bye--General Lee

 

[skykid]

GL, several months ago I told you Delta would unfortunately be in Ch11 by early Spring, and you called me some names and made an attempt to ridicule. You have no idea what you are talking about when it comes to the UAL Ch11. Nobody just asked for an extension. That is dead wrong. The creditors committee thought the exit timing was too aggressive, and have convinced UAL to back off by a month or so. You could do 5 minutes of research and find that out, but instead you post on a subject you don't understand and don't know the facts.

Unfortunately Delta is not positioned well for a Ch11 visit, before or after Oct 17. I wish that wasn't true, but it is. I don't expect that reality will sink in right away for you either.

 

[General Lee]

GL, several months ago I told you Delta would unfortunately be in Ch11 by early Spring, and you called me some names and made an attempt to ridicule. You have no idea what you are talking about when it comes to the UAL Ch11. Nobody just asked for an extension. That is dead wrong. The creditors committee thought the exit timing was too aggressive, and have convinced UAL to back off by a month or so. You could do 5 minutes of research and find that out, but instead you post on a subject you don't understand and don't know the facts.

Unfortunately Delta is not positioned well for a Ch11 visit, before or after Oct 17. I wish that wasn't true, but it is. I don't expect that reality will sink in right away for you either.

Not positioned well, eh? Compared to USAir who filed twice in 3 years? Comapred to United that still doesn't have a good plan? How do you know what the GA judge would do? Maybe we won't go in at all? I don't know. All I was saying is that if we do have to go in, I would rather us go in and do it before the restrictive rules. I am glad you know what will happen. In the meantime, go to your leaders and help devise a plan so you can eventually get out. 32 months???



United Delays Filing Reorganization Plan
Tuesday August 2, 11:02 am ET United Delays Filing Reorganization Plan to Exit Bankruptcy, May Push Chapter 11 Exit to 2006


CHICAGO (AP) -- United Airlines said Tuesday its parent company has delayed filing a reorganization plan to leave bankruptcy, a move that could push its exit from Chapter 11 protection into next year.

The nation's No. 2 airline said last month that it expected to file a Plan of Reorganization and disclosure statement -- which together will provide a blueprint for United parent UAL Corp.'s exit from bankruptcy -- to U.S. Bankruptcy Court around Aug. 1.

On Tuesday, United said it will continue to work on the plan with its unsecured creditors' committee "in order to provide an additional opportunity to continue collaborating on and reviewing the complex, extensive documents as part of the overall confirmation process."

The company said it expects to file the plan in about a month, delaying its previously stated goal of leaving bankruptcy sometime this fall.

"It may be later this year. It may be early next year," United spokeswoman Jean Medina said of an eventual exit.

"When we first discussed exit timing, we had proposed a very aggressive schedule," Medina said. "But both United and the creditors committee think this approach is going to help us have a smoother exit process."

Carole Neville, an attorney for the unsecured creditors committee, said the committee continues to work with United on the plan. She declined to discuss how long the process might take.

The bankruptcy court, along with United's lenders, unsecured creditors and others, must approve a reorganization plan before the carrier exits bankruptcy.

United, a unit of Elk Grove Village, Ill.-based UAL, still needs to secure $2 billion to $2.5 billion from banks to finance its planned exit from Chapter 11. It has been operating with the help of $1.3 billion in debtor-in-possession financing.

United has lost more than $7 billion since filing for Chapter 11 bankruptcy in December 2002. It also has slashed about $7 billion in annual expenses, including two rounds of wage and benefit cuts and termination and replacement of its employee pension plan.





Bye Bye--General Lee

 

[skykid]

In your position I'd want to tone down the arrogance. Have you found the extension United just filed yet? I'm watching this pretty close, and it has been reported for the past month that the creditors wanted more time - that is what this is about.

It doesn't matter as much what the judge does, the problem with Delta is going to be the banks/investors do. You might want to study up a bit on Ch11, you will be doing well to be in that double breasted 32 months after Delta files - and I hope you are. Meanwhile, do yourself a favor and can the arrogance.

 

[General Lee]

In your position I'd want to tone down the arrogance. Have you found the extension United just filed yet? I'm watching this pretty close, and it has been reported for the past month that the creditors wanted more time - that is what this is about.

It doesn't matter as much what the judge does, the problem with Delta is going to be the banks/investors do. You might want to study up a bit on Ch11, you will be doing well to be in that double breasted 32 months after Delta files - and I hope you are. Meanwhile, do yourself a favor and can the arrogance.

I will tone it down. I just think it is funny that everyone knows exactly what will and will not happen. I believe that the creditors have a lot to lose with the third largest airline going down. We have a plan, and the creditors will like that too. And, we only have one union, which is one less obstacle compared to most. We also have some cash and time to play with.

Bye Bye--General Lee

 

[320AV8R]

No,,,not a raise, but they didnt have to take the opposite line and say to management "what ever you say boss". You watch, management has them in check now. When they'r done with the other two groups they will go back to the pilots for some-more pillaging.

WRV-

Management's "opener" was basically a copy of today's UAL contract.

The pilot's ended up taking a 15% wage cut, with very minor work rule chages; (a 15% cut in overtime pay, no bumping rights for ANC based pilots bidding new equipment, etc...). There is a WIDE GULF between what MGMT wanted, and what the pilots gave. MGMT was satisfied with the deal so they could (1) refinance the $1B revolver debt, and (2) focus on the other unions.

Will the pilots give again ? You bet. The current agreement allows MGMT to start negotiating again with them 30 days after the last union settles, (AMFA, PFAA). Expect another 15-20% overall cut, comprised mostly of wages, with some more work rule changes.

Would they pony up more $$$$ before the other unions settle, to keep the company out of CH 11 ? Probably.

320AV8R

 

[WillowRunVortex]

WRV-

Management's "opener" was basically a copy of today's UAL contract.

The pilot's ended up taking a 15% wage cut, with very minor work rule chages; (a 15% cut in overtime pay, no bumping rights for ANC based pilots bidding new equipment, etc...). There is a WIDE GULF between what MGMT wanted, and what the pilots gave. MGMT was satisfied with the deal so they could (1) refinance the $1B revolver debt, and (2) focus on the other unions.

Will the pilots give again ? You bet. The current agreement allows MGMT to start negotiating again with them 30 days after the last union settles, (AMFA, PFAA). Expect another 15-20% overall cut, comprised mostly of wages, with some more work rule changes.

Would they pony up more $$$$ before the other unions settle, to keep the company out of CH 11 ? Probably.

320AV8R

I return to my original point,,,You guys folded like a deck of cards, saving/giving management the necessary energy and resources to go to unprecedented lengths to do battle with the other two groups on the property. I.E. interviewing/training large numbers of contract/replacement mechanics/FA's. What a waste of money! Once management had the pilots in their back pocket it was a free for all for management to go after the other two groups. NWA management is paving the way to use all contract employees at an airline. When will they secretely interview/train replacement pilots?

 

[COpilot]

Ok let me ask this.

The Eastern pilots don't cross the Mechanics picket lines, but the ones that do are SCABS for life, even the ones who went back AFTER the MEC Chariman says to.

Now we have the Mechanics of NWA perhaps going out, but NWA ALPA and pilots are most likely going to be in the cockpits.

Why are'nt the NWA pilots going to be just as big SCABS, as an EAL pilot? WHAT GIVES...

 

[WillowRunVortex]

Ok let me ask this.

The Eastern pilots don't cross the Mechanics picket lines, but the ones that do are SCABS for life, even the ones who went back AFTER the MEC Chariman says to.

Now we have the Mechanics of NWA perhaps going out, but NWA ALPA and pilots are most likely going to be in the cockpits.

Why are'nt the NWA pilots going to be just as big SCABS, as an EAL pilot? WHAT GIVES...

THEY ARE GOING TO BE SCABS in the true sense of the word.

 

[Workin'Stiff]

Just mold that interpretation of "scab" to any way that suits you. In other words... A very loose interpretation.