Originally Posted by
Sniper
If true, it could be very beneficial if the other rumor that AA is setting themselves up for a Ch. 11 filing (which is supposed to be more difficult to do these days, preventing airline management from doing 'a Delta', and going into bankruptcy just to shed liabilities - underfunded pilot pensions, among others) is true.
Generally, a bankruptcy court doesn't look kindly on management asking to abrogate a new agreement, since it would be assumed that management knew about their perilous financial position when the contract was signed, but thought they could afford it.
How does this relate to industry leading rates? If true, the AA rates might be immune to bankruptcy concerns for a bit, allowing other groups to use them in their 'comparison' calculations without concern for the 'status quo' changing in the middle of a drawn-out negotiation.
Delta was flat broke when they went into Chapter 11. If anything they tried to hard and waited to long to file. Managements compensation was almost entirely tied up in massive numbers of stock options. Options they knew they would lose if they filed. The airline was literally 60 days from not making payroll and cash on hand was below the amount most financial people felt was the minimum to enter chapter 11. You have to go almost all cash when you file so you need a cash cushion. Most felt Delta needed 1.5 billion. Instead they waited until they were down to almost 1 billion.