Let''s Talk Facts About Bankruptcy

RV4

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I know there are NO GUARANTEES in BK.

But is seems with many Airlines entering BK before us, we should be able to generate some facts that will show, if and why we would be worse off going there.

I get the feeling Management would be worse off, and they've somehow through propaganda gotten all of us repeating their fear not our own fear.
 
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RV4

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We have all heard this for months now:

We will end up alot worse in Bankruptcy

I open this thread for facts about why we will end up worse. I am open minded and would like facts. Voting on Fear does not sound like the correct the thing to do!

I request that fear based innuendo not appear on this thread.

If you can prove how others have been treated worse, then post that data.

PLEASE, Let's just stick to the facts.

Listed below are eight things to consider about bankruptcy:
  1. Regime Change - Top company executives will have to explain to future investors how, under their leadership, the world's largest airline went from making record profits to bankruptcy in two short years. There is every possibility American Airlines would undergo a change of leadership in the bankruptcy process.
    Accurate Disclosure - The Company would be forced to accurately disclose information during the bankruptcy process. Mr. Carty himself has described the bankruptcy process as invasive. Let's get the facts.
    Time - Bankruptcy buys us time. Time to properly renegotiate and fully consider a contract where the pain is shared in a balanced way among all employee groups.
    1113 process - If we can't get a negotiated contract, the 1113 process will result in an imposed contract that we will be able to renegotiate much sooner than 2009. We stand a far better chance of restoring our contract in a couple years when the industry improves.
    Turnaround Gains - Bankruptcy may give us the opportunity to negotiate things like ESOP/Type S Corporation, seats on the Board of Directors, employee ownership that gives us a fair chance to see some upside gain for our sacrifices. To learn more about the ESOP option go to: www.buyitfixit.org
    Bankruptcy anyway - We have no assurance this TA will keep us out of bankruptcy. If we accept the TA and go into BK we will end up giving twice. Have we not learned anything from the plight of our friends at USAir?
    Pension - The APA has taken council from a former senior member of the PBGC. He has indicated that the pilot's A fund is healthy enough that it would not be subject to a distress termination under bankruptcy. Keep in mind that UAL's pension remained virtually untouched in the BK process.
    Politics of Bankruptcy - With United Airlines and American in bankruptcy, close to 40% of the airlift in this country would be in BK protection. Several other major carriers, in an effort to level the playing field and with financial troubles similar to ours, will almost certainly have to file for protection. This scenario raises a huge political issue. What is the ATSB doing to stabilize an industry that is vital to the national economy and on the verge of collapse?
 
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RV4

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With all due respect, your post is filled with many questions, ZERO FACTS, and many innuenedos.

Can you read the topics starting post and try again please? Thank You.

Fear is getting us nowhere.

Does anyone have the facts that will generate an informed choice? I am sick of the uniformed, factless, questions, determining our future?
 

xlurker

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I did read it again and am wondering where you pulled all of those "facts" from.

No need for me to continue posting in this thread if I cannot stay on topic or reach in as far to pull out "facts"
 

flyhigh

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Here''s a fact for you...one that Carty has noted in his hotline msg.

Only two carriers have found long term survivial after filing for bankruptcy: America West (HP) & Continental (CO). Even recently, HP required a federally backed loan to survive this latest crisis in the industry. Both pay workers significantly less (both pay and work rules compiled to equal to entire benefit package). Both survived after dramatic cultural change and contract changes. Both emerged from bankruptcy and entered into one of the greatest economies in US history.

For CO, you might note that they were once the largest carrier in the world and now are significantly behind other major carriers.

Add to that the effect bankruptcy has on a company. You have to make a complete turnaround to increase credit ratings. That means you have to show a string of profitability to show you''ve changed your ways. In the event this doesn''t occur, you continue to have to borrow unter terms that reflect a prior bankruptcy. This severely inhibits a company''s ability to invest in the business and grow or even maintain.

Is this what you want for AA or would you prefer a long slow failure??
 
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RV4

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On 4/6/2003 12:03:09 PM flyhigh wrote:

Add to that the effect bankruptcy has on a company. You have to make a complete turnaround to increase credit ratings. That means you have to show a string of profitability to show you''ve changed your ways. In the event this doesn''t occur, you continue to have to borrow unter terms that reflect a prior bankruptcy. This severely inhibits a company''s ability to invest in the business and grow or even maintain.

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So you are opposed to "a complete turnaround ", " a string of profitability" and you want to "grow" in an over capacity environment?

What are you smoking?
 
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RV4

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On 4/6/2003 12:03:09 PM flyhigh wrote:

Here's a fact for you...one that Carty has noted in his hotline msg.

Only two carriers have found long term survivial after filing for bankruptcy: America West (HP) & Continental (CO). Is this what you want for AA or would you prefer a long slow failure??

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If Carty and/or you for that matter believe what you post,

Then why did AA buy TWA and even require them to file BK first? Given his and apparently your philosophy. Why would Carty bring into AA an organization that has such a low chance of survival and demand that they enter BK before bringing them in? SOund like a leadership blunder.

It appears BK was the right thing for TWA just prior to the AA purchase.

Where are your "FACTS" that we would be worse off?
 
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RV4

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Have our co-workers been given hypnosis and directed to have love and passion for fear without facts? Most interesting. Maybe we should allow outisders to study such human behavior and document the study for future gernerations. Although such data could be used in two ways. One to prevent mistakes, and the other to rule and govern compliance.

What about Bankruptcy? Where is the proof and facts that we "would be worse off" than accepting the current 6 year demise?
 
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RV4

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On 4/6/2003 12:18:39 PM Senor Pelon wrote:

Anyone needing BK counseling, please see your nearest former TWAer.

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Now that was very helpful and factual.

I am getting the feeling there are "NO FACTS", so are we voting on FEAR and claiming we are informed? What Fool would do such a thing?
 

Buck

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Who do you think will pay for all of the debt the suppliers are screwed out of? Put the airline suppliers out of business, that should help the industry.

This a tough one, but it would seem that American Airlines is going to offer it''s suppliers with stock options to compensate for agreeable contracts.

Who will buy all of the airline assets put up for sale by the court? No sale of assets to pay creditors = concessions from employees to get costs down to profitability.

If the industry falls to the levels you are suggesting, then it would seem that the only entity able to pick up the tab would be the government. But that is reregulation. We would not want to go there, would we?

The court will do whatever it takes to get the airline to profitability. Park airplanes? go ahead and screw the lease holders and lay off all of the employees required for those routes.

If airplanes are parked, then the over capacity issue goes away. This is why they are leases. These leases are contracts between the airline and the leaser. Labor should not beheld accountable for a bad business plan or the inability for a management team to implement it''s plan. Prior to 1983 at American and most likely prior to deregulation in 1978, there were layoffs as the economy of the airline dictated. Today the airlines attempt to keep a broken route system and the industrial unions attempt to man it. Yes some adjustment may be required, but not at the behest of labor alone.
 

xlurker

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There you go - what a brilliant idea.

Chain reaction bankrupty for everyone.

Who do you think will pay for all of the debt the suppliers are screwed out of? Put the airline suppliers out of business, that should help the industry.

Who will buy all of the airline assets put up for sale by the court? No sale of assets to pay creditors = concessions from employees to get costs down to profitability.

The court will do whatever it takes to get the airline to profitability. Park airplanes? go ahead and screw the lease holders and lay off all of the employees required for those routes.

It goes on and on. The attorneys will be the only ones that make out on this deal.

Try and save the airline ourselves is much better than the judge doing it for us.
 
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RV4

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On 4/6/2003 11:53:03 AM xlurker wrote:

No need for me to continue posting in this thread if I cannot stay on topic or reach in as far to pull out "facts"

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OK, Later, thanks for stopping by.

Or feel free to post facts that dispute what I posted for you to "consider"?
 

xlurker

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Am I posting in this thread again?

Buck:

Offers of stock to suppliers is not from a Bankrupt airline.

The government picking up the tab - my point exactly, who will pay for that?

Leases are not 1 year at a time. If they were, we would have much fewer airplanes. Those leases were signed before 911 etc. Bad business decision to not have a crystal ball? AA does not park them now because they will still have to pay the leases, Some revenue from them is better than none.
 

Buck

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On 4/6/2003 12:53:55 PM xlurker wrote:

No you did not say from a BK airline, I did. All of my comments were as if airlines were BK.

Do you honestly think we are flying aircraft knowing it would cost less to park them? There is a difference between poor business judgement and stupidity.

If you think we are that stupid, we all better get out now.

I am sure we are recovering the "fixed" cost of those airplanes. We would otherwise be paying if they were parked.

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Do I believe that we are flying aircraft at a higher expense that it cost to park them, yes!
I know of one way to save $280,000 per aircraft (md-80) per year and the company will not take the step.
No it is not stupidity, it is poor judgement within the companies business plan.
You do not recover the cost of flying a practically empty airplane.
 

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