Airline Bankruptcy

I have tickets with Delta for international travel for the Xmas
holidays. Delta is in precarious financial condition. What typically
happens when a carrier file Chapter 7. Do they just keep flying under
protection, or do they typically cancel flights? Do other carriers
honor tickets? I guess over the holidays honoring tickets would be
hard.

Thanks.

"Buck Turgidson" wrote in message
...
I have tickets with Delta for international travel for the Xmas
holidays. Delta is in precarious financial condition. What
typically
happens when a carrier file Chapter 7. Do they just keep flying
under
protection, or do they typically cancel flights? Do other carriers
honor tickets? I guess over the holidays honoring tickets would be
hard.

First off, they would certainly try to file Chapter 11 (stay in
business while reorganizing) rather than Chapter 7 (cease doing
business right now).

Buck Turgidson wrote:

I have tickets with Delta for international travel for the Xmas
holidays. Delta is in precarious financial condition. What typically
happens when a carrier file Chapter 7.

If needed, Delta would first go Chapter 11, which is bankrupcy protection.
Under bankrupcy protection, the airline normally continues to operate,
although it is likely it will re-adjust its schedules etc. It is given a few
months to convince the judge that it can find some way out of bankrupcy (and
if sufficiently convinced, the judge extends the period of protection against bankrupcy).

Note that United has been under chapter 11 bankrupcy protection for over 2
years and by the time it emerges, if it emerges, it will likely have been 3
years under bankrupcy protection.

It is only once all hope has evaporated of a rescue package to allow the
airline to emerge from bankrupcy protection that the creditors/judge decide
that liquidation (Chapter 7) is the only alternative.

If Delta enters bankrupcy protection in the fall, chances are very good that
it will still be operating normally at christmas, especially since it is a
profitable season.

What is key here is how long the succesfull carrier's fuel hedges will last.
Once outfits like Valuejet/Aistran, Southwest and Jetblue need to get new fuel
hedges at current oil prices, they will be forced to raise their fares
substantially, and this will allow Delta to raise its fares and stop losing money.

It is unlikely that an airline the size of Delta would stop operating without
warning. It would seek bankrupcy protection well before it got to a point
where airports would refuse to allow its aircraft to take off, credotors seize
aircraft etc etc.

First off, they would certainly try to file Chapter 11 (stay in
business while reorganizing) rather than Chapter 7 (cease doing
business right now).


Sorry, wrong chapter

"Buck Turgidson" wrote in message
...
I have tickets with Delta for international travel for the Xmas
holidays. Delta is in precarious financial condition. What typically
happens when a carrier file Chapter 7. Do they just keep flying under
protection, or do they typically cancel flights? Do other carriers
honor tickets? I guess over the holidays honoring tickets would be
hard.

Thanks.

They typcially don't file under Chapter 7. They typically file under
Chapter 11 which is a business reorganization and then carry on as usual.
You'll be safe with Delta in December.

On Sun, 10 Jul 2005 09:10:36 -0500, "Jeff Hacker"
wrote:


"Buck Turgidson" wrote in message
...
I have tickets with Delta for international travel for the Xmas
holidays. Delta is in precarious financial condition. What typically
happens when a carrier file Chapter 7. Do they just keep flying under
protection, or do they typically cancel flights? Do other carriers
honor tickets? I guess over the holidays honoring tickets would be
hard.

Thanks.

They typcially don't file under Chapter 7. They typically file under
Chapter 11 which is a business reorganization and then carry on as usual.
You'll be safe with Delta in December.

Hi

What about United Airlines in Sept??

Regards
KGB

"KGB (KGB)" wrote:
What about United Airlines in Sept??

UA just announced it is re-hiring 600 flight attendants and expects to have
recall all the furloughed FAs since 9-11 by the end of 2005 due to high
passenger loads and added flights to handle the demand.

UA expects to have a restructuring plan in place in August with exit before
end of 2005. So it is unlikely that creditors would pull the plug on life
support now.

US and HP have gotten another investor last week, so US Air also looks like it
will be able to emerge from bankrupcy ahead of UA.