Are the Bankruptcy Dominos Falling?

[Speedbird]

DLFlyer31 stated:

Low-fare carriers also play a critical role. If they continue to add capacity into the market while the majors keep cutting capacity, the yield situation will not improve.

While your statement is correct concerning yields, that is not the fault of the low-fare carriers. For many of them, these low yields still produce satisfactory results to their bottom lines and operating cash flows. Should they be handcuffed or penalized for that?

If low-fare carriers exist at all, its in large part because of the network carriers long-term inability to remain efficient enough to meet the market realities of a deregulated environment.

However, that may change soon since its appears that the industry wise men are making their pilgrimage to Capitol Hill (again) to ask for more relief and aid from the government.

They are in effect throwing in their collective towels and saying that the hub-and-spoke/network carrier business model is irrevocably broken, and must now require government intervention to guarantee adequate service to all users of the system. I guess the airlines must now be considered a public utility.

All I can say is be careful what you ask for because you might just get it.

 

[cavalier]

IMHO the Feds should never have gotten themselves into this mess, but since we are here and these are indeed somewhat uncharted waters, I believe, as hard as a pill it is to swallow, that the Feds must enforce some kind of restrictions on CH.11 fare wars.

So this being the first time U goes Chapter 11 they should be penalized by the government. Change the rules midstream. All the others that went the chapter 11 route used it to their advantage. Funny how I see everyone competitors screaming unfair, but it was ok when U was going down in flames!

 

[Diesel8]

BusDrvr,

And here I was trying to be nice. U declaring CH.11 and lowering fares will not put a dent in jetBlue, but it may do irreperable harm to UAL, DAL and AMR.

I believe your present employer is still solvent, but.........................

 

[Diesel8]

Busdrvr,

It was not meant as an insult to UAL, nor you. U declaring CH.11 will probably have an effect of UAL's competition and anything driving yeild lower for the major carriers at this point is a really bad thing.

 

[Busdrvr]

[blockquote]
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On 9/23/2002 3:22:33 PM Diesel8 wrote:

BusDrvr,

And here I was trying to be nice. U declaring CH.11 and lowering fares will not put a dent in jetBlue, but it may do irreperable harm to UAL, DAL and AMR.

I believe your present employer is still solvent, but.........................
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[/blockquote]

Not really, U has virtually 0 overlap with UALs route system, that's why we wanted to buy/codeshare. As for your last remark, your history of picking employers apparently isn't good, I'd exercise my options while i could.

 

[UAL777flyer]

Diesel8,

Yes, but it will finally force the major carriers to do something they should have done years ago: get firm control on their costs and implement a sustainable business model.

 

[freerwing]

You are saying that these shares on the OTC can become worthless any day???!!! Regardless of the positive turn on the reorganization proceedings???!!! Could you elaborate on that a little more for those of us who are not so informed on investing in bankrupt shares?

Thanks!

 

[DCAflyer]

Freerwing asked:

You are saying that these shares on the OTC can become worthless any day???!!! Regardless of the positive turn on the reorganization proceedings???!!! Could you elaborate on that a little more for those of us who are not so informed on investing in bankrupt shares?

DCAflyer responds:

All existing shares will be cancelled, much like a check written on a closed account. New shares will be issued.

 

[freerwing]

Is that to say that the UAWGQ shares are liquidated to the investors at their then current value (should there be any value to those shares at that time...)?