787's?

[eolesen]

One major flaw in Parker's synergy arguement is that he expects DL's leasing companies to just take their airplanes back with no questions asked as they did at US. They did it at US because the company was almost dead. That's a pipe dream that wouldn't happen at DL.

Just because they might have thought it out doesn't mean the lessors are going to grant it to them.

Are you two really that ignorant about what the bankruptcy process is all about?

Leases are contracts, and DL has free rein to reject just about any contract they need to reject without needing to get permission from the other side.

Even if the leases have already been affirmed (doubtful but possible), it only takes a hearing and the judge's approval to reject them.

 

[BoeingBoy]

There are two issues when it comes to BK and airplane leases....

- renegotiating lease rates. US was successful in doing this in the 1st BK, but used airplane lease rates went in the toilet after 911. In the 2nd BK, this wasn't a very successful avenue of reducing costs. For any aircraft types in demand (737-800, 757, 767, 777) this will probably not be a very successful route.

- rejecting leases. As Former Moderaator says, the debtor has almost free rein to reject leases in BK. Once leases are assumed, though, it's a little harder. Gotta tell the judge "Forget what we said about it being vitally important for our success to assume this lease, which you approved. We've changed our mind and decided we have to reject this lease or we may liquidate."

I don't know what DL plans as far as rejecting leases - US did a fair amount of that in both BK's. Parker's plan to reduce combined capacity by 10% makes one wonder where those cuts will be.

Jim

 

[757inthebarrel]

Are you two really that ignorant about what the bankruptcy process is all about?

Leases are contracts, and DL has free rein to reject just about any contract they need to reject without needing to get permission from the other side.

Even if the leases have already been affirmed (doubtful but possible), it only takes a hearing and the judge's approval to reject them.

I'll try not to call you ignorant. All DL aircraft leases have been renegotiated. It's not quite as simple as going back to the judge and saying we changed our mind, we don't want these anymore. A revisit would greatly extend the bankruptcy and expand the creditor pool, blowing holes in Parkers plan.