Originally Posted by
NERD
Thank you. This will be a prepackaged deal with the financing in place. Hell, its probably already lined up. Just trying to spin it that its labor's fault.
Unless they have labor onboard and agreements on the contracts hammered out its not a pre packaged deal. Most creditors are not going to supply financing without seeing signed labor contracts or contracts that have been put in place by the judge. After fuel labor is your biggest expense. Its the key point in any chapter 11 filing. If labor is not onboard then a pre packaged bankruptcy can't happen with a airline. How do you even put out a business plan not knowing your labor costs to sell the package?
There is one big difference between AMR and Delta in a chapter 11 filing. Delta management because of the massive number of stock and options they held fought to keep the airline out of Chapter 11 far longer then they should have. As a consequence Delta came very close to a shutdown and had under a 90 day cash supply. AMR is not cash poor and in fact might not even need DIP financing like Delta. The downside of filing with a lot of cash however is the creditors may decide your worth more dead then alive or in pieces rather then whole.