Stop The Madness!
- Thread starter Hopeful
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While it could be viewed as a competitive advantage, it is more than offset by a corresponding inability to gain external funding at reasonable rates. In addition, a company in bankruptcy is running a mostly cash business, which further reduces financial leverage.Bob Owens said:
On balance, you're better off outside of bankruptcy than inside.
mweiss said:
Sure especially if you can sucker your employees into giving up massive concessions.
By "you're" you are speaking from the company's point of view.
However, from where we are I think that we should have called their bluff and if need be go into BK and even let them liquidate all the majors (like that would have happened) than give up what we did. As it is I do not see any future so whats the difference? Why should we fight SWA when they pay better? I hope SWA expands more and more and hires out in ISP. Who would not want to work for a company like SWA?
If AA had gone BK then more than likely Delta and NWA would have followed, then with the majority of the air transportation system at risk of ceasing operations, and labor not budging the government would have been forced to make some kind of bailout or reorganization.
Bagbelt
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There have been a lot of changes at aa. And when they say they cut 3200 jobs, they are not talking about the untold number who retired with 7 weeks vac and A scale to be replaced by B scalers. I think aa alone said they are only looking at int'l expansion, domestic retraction and using less aircraft next year. They seem to be willing to ride it out to learn from others mistakes or successes. I am profoundlly shocked at dl's losses, they are for the most part non-union. They have the flexibility to do anything, which doesn't seem to be working yet. Instead of reinventing the wheel, maybe we should get out of the passenger business and fly freight.
True, though the strike has to last a pretty long time to make that a useful option.Bob Owens said:
You mentioned Reagan's move to fire union employees. I thought that was your reference.
Well, since it's the company that files for bankruptcy...🙄Bob Owens said:
...assuming that it's a bluff in the first place. You've already proven that you don't have enough tools to recognize whether or not they've been bluffing. It's pretty dumb to push all of your chips in the pot without looking at your opponent's cards when you have the option to look at them.
A good argument for exiting the industry. Why do you stay?
On what do you base this allegation? Another carrier filing for bankruptcy should have little to no impact on your own financial position. Some aspects will help you, and others will hurt you. AA and DL aren't losing money because US and UA filed for bankruptcy.
=mweiss,Jan 24 2005, 10:45 PM]
Common sense dictates that they will not show you the cards that count. Besides what makes you think that this game involves all our chips?
Because I have three kids and a wife to support and I have not aquired enough wealth to just walk out the door. Give it a little time, some have already left, more will.
Well thats not what AA and others have claimed in the past. Under BK AA would have sold tickets at an even lower price to generate cash to fund operations, not service debt, like airlines in BK often do, this would put DL and NWA at a disadvantage because they would still be servicing debt. (Once again you are talking as if the company's interests and the employees are one and the same.)
While AA and DL mat not be losing money because US and UA are they are losing it for the same reasons.
Common sense dictates that they will not show you the cards that count. Besides what makes you think that this game involves all our chips?
Because I have three kids and a wife to support and I have not aquired enough wealth to just walk out the door. Give it a little time, some have already left, more will.
Well thats not what AA and others have claimed in the past. Under BK AA would have sold tickets at an even lower price to generate cash to fund operations, not service debt, like airlines in BK often do, this would put DL and NWA at a disadvantage because they would still be servicing debt. (Once again you are talking as if the company's interests and the employees are one and the same.)
While AA and DL mat not be losing money because US and UA are they are losing it for the same reasons.
The law says that, as a public company, they must.Bob Owens said:
Because if you lose, you don't have a job anymore.
That's a copout, albeit a common one. Working for one employer does not preclude you from applying for a job at another.
Not true at all. Under bankruptcy, your debt is not cancelled. It may be reduced, but is almost never eliminated.
Since the company files for bankruptcy, not the employees, it doesn't much matter what the employees' interest is when determining the advantages and disadvantages of filing.
Agreed, as a blanket statement. To be clear, though, US and UA's bankruptcies are not the reason.
Bagbelt said:
I agree completely with your last sentence. In 1999, I said that AA should go after a lot more freight and mail because people were angry at the high airfares and I said it would not last. AA's position is "we are a passenger airline". Although AA is a passenger airline they should have substantially diversified their revenue base. They have always said "let Southwest have the low fare paying people and we will take the business traveler." Now they are stuck with full planes carrying low fare paying people.
Resman1 said:
If zero seats were sold at full Y, AA would have lowered the price until it did sell some seats.
Just because that number might be so large as to be ridiculous to you doesn't mean that AA never sold any at that price. After all, I can't afford to spend $100k (or more) on a new car, but there are lots of them at that price level from which to choose if I change my mind.
Additionally, most full Y customers are on the receiving end of corporate discounts that bring the $2,600 down substantially. For some, as much as a 50% discount.
In 2004, AA had around $700 million in freight and mail revenue with a several hundred million dollar profit. That number will be growing this year, unfortunately cargo can only grow at about the same rate as wide body departures grows.
