T-Bird76
2005-09-02, 01:41 PM
With the price of jet fuel hitting $2.27 a gallon up from $1.91 before the hurricane hit are all bets off for who will survive? The rumors are flying and the analysts are predicting doom and gloom for some of the major players.
Both Northwest and Delta probably the to most vernable major carriers not already in Chap 11 have issued bankruptcy warnings which could be filed within weeks if not days. Northwest who is already suffering from a strike by its mechanics could dissolve the mechanics right to collective bargaining under Chap 11 hire full time replacement workers in order to achieve the cost savings it needs to survive. Currently Northwest is using management, non-employee replacement workers, and contract services to maintain their aircraft. A Chapter 11 filing will leave the hundreds of mechanics permanently out of work.
The key date for any bankruptcy filing will be Oct 17 when the bankruptcy laws change. The change will make it harder for companies to avoid paying back debt. The new laws also state a company must file a reorganization plan within 18 months of their filing or risk being liquidated by creditors. If this was the case more then two years ago UAL would have been long gone.
A brief look at the players risking a chapter 11 filing would most certainly include Fly I, Delta, Northwest, America West (possibly jeopardizing the buy out of U.S Airways), and Frontier. Spirit's finances are unknown since they are a private company but sources also report they to are struggling to make money. Morgan Stanley has reported that the only airlines they believe will survive September without filing for Chap 11 will be American, Southwest, and Continental. What will happen to carriers already in Chap 11 is uncertain but one thing is for sure, a U.S airline will go out of business within the next few months. All bets are off who it will be.
Both Northwest and Delta probably the to most vernable major carriers not already in Chap 11 have issued bankruptcy warnings which could be filed within weeks if not days. Northwest who is already suffering from a strike by its mechanics could dissolve the mechanics right to collective bargaining under Chap 11 hire full time replacement workers in order to achieve the cost savings it needs to survive. Currently Northwest is using management, non-employee replacement workers, and contract services to maintain their aircraft. A Chapter 11 filing will leave the hundreds of mechanics permanently out of work.
The key date for any bankruptcy filing will be Oct 17 when the bankruptcy laws change. The change will make it harder for companies to avoid paying back debt. The new laws also state a company must file a reorganization plan within 18 months of their filing or risk being liquidated by creditors. If this was the case more then two years ago UAL would have been long gone.
A brief look at the players risking a chapter 11 filing would most certainly include Fly I, Delta, Northwest, America West (possibly jeopardizing the buy out of U.S Airways), and Frontier. Spirit's finances are unknown since they are a private company but sources also report they to are struggling to make money. Morgan Stanley has reported that the only airlines they believe will survive September without filing for Chap 11 will be American, Southwest, and Continental. What will happen to carriers already in Chap 11 is uncertain but one thing is for sure, a U.S airline will go out of business within the next few months. All bets are off who it will be.