JayhawkDude
Just happy to be here!
- Joined
- Feb 14, 2002
- Posts
- 88
Okay, for those of us who weren't economics majors or insurance salesmen, what are the negatives to declaring bankruptcy for an airline. I'm not talking about the employees, shareholders, the government, etc. I'm talking about the company- the decision makers- the board or the CEO or whoever the guy is who says, "Yep, let's file the papers."
From an uneducated point of view, there doesn't seem to be much of a cost. The company can eliminate pensions, reduce payrolls, reduce debt to suppliers and lessors while assets like aircraft are protected by judges. I know a small segment of the travelling public may avoid an airline if it thinks operations will be disrupted, but it seems they rarely are. Frequent flier programs are often protected and I can find few other downsides.
Further, once a company declares BK, what is the motivation to come out? For example, United has been in BK for many months now and I can't see (as an outsider or member of the traveling public) how it affects their day-to day operations. Why hurry to leave bankruptcy? If you're the CEO and you're collecting your paycheck, what's in it for you?
This is an honest question. I'm not trying to sound holier than thou. I just don't understand the process. I'd appreciate it if anyone could enlighten me (without people slamming each others' airline.)
Thanks.
JD
From an uneducated point of view, there doesn't seem to be much of a cost. The company can eliminate pensions, reduce payrolls, reduce debt to suppliers and lessors while assets like aircraft are protected by judges. I know a small segment of the travelling public may avoid an airline if it thinks operations will be disrupted, but it seems they rarely are. Frequent flier programs are often protected and I can find few other downsides.
Further, once a company declares BK, what is the motivation to come out? For example, United has been in BK for many months now and I can't see (as an outsider or member of the traveling public) how it affects their day-to day operations. Why hurry to leave bankruptcy? If you're the CEO and you're collecting your paycheck, what's in it for you?
This is an honest question. I'm not trying to sound holier than thou. I just don't understand the process. I'd appreciate it if anyone could enlighten me (without people slamming each others' airline.)
Thanks.
JD