Boomer,

Sorry you had to go through all that at Comair. It sounds like it was a raw deal. I certainly don't know as much about the comair situation as you do, and your insights are really helpful.

Bankruptcy is a sh$t sandwich no matter how you slice it. As I understand it, right off the bat management can accept or reject any contract they had entered into pre-bankrupcty. (No surprise they usually target everyone else's contracts and not their own).

Once they have rejected a contract, like a pilot group's contract, they then either reach a deal on a new contract (rare! if they coulda reached a deal they would have done it earlier) or take it to the judge in 1113c. The judge's role is to see if he can make all the pieces work by looking at projected revenues, the FA's pay, pilots pay, maintenance, management etc..etc...if there is no way in hell it would work, you get liquidation. In that sense, it is open to debate what the judge looks at when imposing concessions, but I think most people would tell you the judge looks at wages compared to industry averages, and concessions that labor groups have already given, and things along those lines. I guess the issue with Comair was the judge viewed concessions that were due to snap back as not much of a concession.

If there is a solution to the mess by bringing in new labor contracts, then the judge imposes the labor contracts that he thinks spread the pain around fairly. Of course managements have a way of dodging the bullet here with post-petition bonuses and other shenanigans that they pay themselves for supposedly righting the ship. The judge can't do much about these post-petition bonuses that happen after the fact. This is an unfairness in the system that should be fixed, and really happens because shareholders are too comatose to know they are being robbed blind in these situations.

The name of the game is to avoid BK, and that is what makes this situation so tough. Is Menke working in good faith? Is he trying to save the business, or is he just preparing for bankruptcy, regardless? That is the million dollar question.

At Frontier, Menke was making some progress until their credit card processing company panicked and pulled the plug - forcing them into bankruptcy. Pinnacle seems to be a ways away from anyone doing that to them (the only entity that could is Delta, and they run litigation risk if they withhold payments), so Menke might have enough time here to right things. We'll see.

M.