Well, no wonder we're pulling back at SJU!

[will fix for food]

Unfortunately, if AMR was to file BK, it will not be the same as the others (UAL, US, NWA, DAL) . It is a different ballgame, and when you go into BK, you are not necessarily in control. AMR could be dismantled and assetts sold off to the highest bidder, US could initiate a takeover, with the sale of some of the assetts, many things could happen. AMR just didnt play their cards at the right time, in the right fashion.

US?

Did I read that right?

US?

 

[Bob Owens]

Not only do employees get screwed, so do vendors, customers and lenders.

Some vendors, doubtful any lenders. Sure they may end up with a write off, that they can use to avoid paying taxes but going forward they can hammer the airline and more than make up for whatever they lost. Employees on the other hand have terms put in place that they never agreed to.

Look at AA, now they didnt go BK but they got the benifits of BK as far as the employees go. Their workforce has shrunk dramatically, they pay them less and their revenue has increased. My guess is other carriers have seen the same, yet they arent posting record profits, why? Because the vendors and lenders are getting a lot more than they used to. The biggest culprit is the oil companies but they arent the only ones.

 

[Bob Owens]

If four of your neighbors go into foreclosure, good luck selling your house for a fair market value, if you can sell it at all. It won't matter if you were the one working two jobs to pay your mortgage ontime, making improvements, and in general taking care of your property. Your house is going to be priced considerably lower because of your neighbors.

Why would I sell? A few years back my neighbor went BK, how would that force me to sell my home? House pricing is not a science, its an art and there are many variables that can affect the price you get on your home.

The fact is I dont really concern myself too much with the value of my home and how my neighbors financiial difficulties would affect it, for now my home is an expense, those expenses concern me more than what the value may be if I chose to sell it. My neighbors arent going to get lower electric rates, Gas rates, insurance rates or food bills by allowing a foreclosure.

Not much different in airline-land. The irresponsible ones got a do-over, and were rewarded with lean cost structures and shredded workrules, while the guys who were responsible wind up at a disadvantage. And it's not just workrules. Remember the pension funding issues from a few years back? The guys who dumped their plans got rewarded with longer funding windows than the airlines who didn't dump their pensions...

Well thats half the story, the fact is that I could still borrow money at 5% while those who foreclosed will be paying double digit rates if they can even get a loan. While they walked away from debt they pay more every time they buy something, rent instead of own and in the end their costs are higher than mine. Where's the disadvantage to not filing BK? Those who dumped their pensions got longer windows (funny, I thought that AA did get a longer window for funding pension obligations a few years ago) but many had to go to a 401K where in some cases they had to lay out more today than they would under the DB. SWA pays out more per person that AA does. My last total Value Statement put AA's contribution at just over $1100, a similarly situated mechanic at SWA would have recieved over $8000.

Like it or not, ticket prices are going to be the same across the board for airlines, and how profitable you are depends entirely on how low or high your internal costs are.

Sounds good but ticket prices are not the same, as you should know, call one minute you get one price, call 10 minutes later you get a different one for the same seat.

This isn't like Apple and Microsoft, GM and BMW, or McDonalds and Outback Steakhouse. Air travel is a commodity to the masses. The few who chose based on product vs. price aren't going to be able to offset all of the cost imbalance.

Hmm, still have people buying those business and first class seats.