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Delta Air Lines Prepares Chapter 11 Filing
n e w s wrote:
Delta Air Lines Inc. could file for Chapter 11 bankruptcy protection as soon as next week, a source familiar with the matter said yesterday. Interesting timing. I was expecting this to happen after the elections. Although I suspect this won't make much of a news dent in the USA with the media in a pre-election frienzie. What I don't quite understand is why there is an implied threath of bankrupcy right away if pilots don't agree to concessions. There seems to be concensus that bankrupcy is inevitable. Do pilots really have any incentive to get some agreement before bankrupcy when they know perfectly well that any "wins" they make can be voided weeks later when the judge voids their agreement ? Seems to me that an agreement reached during bankrupcy and approved by a judge stands more chances of surviving bankrupcy than any contract done prior to bankrupcy. |
#2
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"nobody" wrote in message ... n e w s wrote: Delta Air Lines Inc. could file for Chapter 11 bankruptcy protection as soon as next week, a source familiar with the matter said yesterday. Interesting timing. I was expecting this to happen after the elections. Although I suspect this won't make much of a news dent in the USA with the media in a pre-election frienzie. What I don't quite understand is why there is an implied threath of bankrupcy right away if pilots don't agree to concessions. There seems to be concensus that bankrupcy is inevitable. Do pilots really have any incentive to get some agreement before bankrupcy when they know perfectly well that any "wins" they make can be voided weeks later when the judge voids their agreement ? Seems to me that an agreement reached during bankrupcy and approved by a judge stands more chances of surviving bankrupcy than any contract done prior to bankrupcy. The argument is that if the pilots agree before a bankruptcy filing, the filing may well be avoided, like with American Airlines last year. Remember that there is a tremendous cost associated with bankrupty, including administrative fees paid to the U.S. Trustee's office, as well as attorney's fees in the millions of dollars, all of which could be more appropriately used to fix the airline. |
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Cyrus Afzali wrote:
Wrong as usual. Bankruptcy is in no way a given if enough concessions are reached. Look at US Air. Pilots there, seeing the writing on the wall, decided it was better to keep negotiating when they still had an opportunity to influence the eventual outcome. Once a carrier's in bankruptcy, the ability of any one group to make a huge impact is much, much less. Yet, the negotiations of before bankrupcy did not ensure whatever contract would survive and US Air is a good exmaple since pilots agreed to a even newer contract with more pay cuts last week (inside bankrupcy). And even inside bankrupcy, it isn't a given. Look at United. United now wanst more concessions from employees. |
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