No, That's Not a Terminal....It's a Courthouse!
This week, there's a lot of airlines hanging out in the judge's chambers.
Both Delta and Northwest have filed for bankruptcy in New York's Bankruptcy Court today. Delta claims to be a little under $7 billion in the hole, making it the ninth largest bankruptcy in American history. Northwest is facing $2.5 billion in payments to its underfunded pension plan, among other obligations.
Both airlines rushed to beat the 17 October deadline for filing under the old bankruptcy laws. (After all, it is very important to ensure financial rewards to the clowns who got them in financial difficulties, and that will be much harder to do under the new rules.)
One of the other airlines to file for bankruptcy will soon be back in court, too. This time, US Airways and America West hope to get a judge's approval for their merger. This is the final step to merging the companies as soon as 27 September.
Longtime shareholder (and nemesis to the America West board of directors) Seymour Licht described the merger at the shareholders meeting discussing the matter as a marriage of two weak sisters, one who was terminally ill (US Airways), and one who was in intensive care (America West).
So far, American and Continental are the only pre-deregulation major carriers to not have filed for bankruptcy this year.
Both Delta and Northwest have filed for bankruptcy in New York's Bankruptcy Court today. Delta claims to be a little under $7 billion in the hole, making it the ninth largest bankruptcy in American history. Northwest is facing $2.5 billion in payments to its underfunded pension plan, among other obligations.
Both airlines rushed to beat the 17 October deadline for filing under the old bankruptcy laws. (After all, it is very important to ensure financial rewards to the clowns who got them in financial difficulties, and that will be much harder to do under the new rules.)
One of the other airlines to file for bankruptcy will soon be back in court, too. This time, US Airways and America West hope to get a judge's approval for their merger. This is the final step to merging the companies as soon as 27 September.
Longtime shareholder (and nemesis to the America West board of directors) Seymour Licht described the merger at the shareholders meeting discussing the matter as a marriage of two weak sisters, one who was terminally ill (US Airways), and one who was in intensive care (America West).
So far, American and Continental are the only pre-deregulation major carriers to not have filed for bankruptcy this year.
posted by KoryO @ 8:47 PM
3 Comments:
At 3:19 AM,
Ken said…
It wasn’t the price of jet fuel, or market forces that brought down Delta Airlines. It was a culture of arrogance among management and an adversarial relationship with the equally arrogant pilots. The management at Delta believed their own rhetoric that they were better than everyone else and incapable of failing. In the end it was their air of superiority that blinded them to a changing market. Early on they felt no need to compete with new upstart carriers that would eventually run rings around them.
At 9:54 PM,
eLarson said…
Are they looking to dump off their pension plan since UAL did?
At 11:06 PM,
KoryO said…
It looks like all of the older carriers are looking to dump their pensions. My dad had one from the airlines, and while it wasn't lavish, it did allow him to pay the bills along with his social security.
I just remember when Delta was considered one of the best places to work. I mean, back in the 80's, the employees got together to buy the company a new plane when it hit a rough patch. I could see maybe JetBlue or Southwest employees doing something to help their employers, but I doubt they would be willing to go that far. Delta had a lot of employee loyalty then.
The pilot's unions have always been hardheaded, and there are damn good reasons why the rest of the airline workers hated those guys. I still put most of the blame, however, on the management. They signed off on the collective bargaining agreement, knowing full well they couldn't afford it.
I can guarantee none of the idiots responsible for authorizing that are going to be fired, but a lot of little guys trying to support families will catch it in the neck.
Unfortunately, I am sure there are some sweeteners in the bankruptcy procedings to reward the same group of incompetents who have wrecked these companies. They're not going to learn a thing, and will be back in bankruptcy court in a few years.
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