Originally Posted by
Nevets
Listen to the call. It was alluded that it may harm the holding company. Also, the benefit of bankruptcy protection would be the renegotiation of labor costs. But they admitted that the financial problems with xjt are with the CPAs, not really labor costs. In other words, it's a revenue problem more than anything else. Which is why, other than parking unprofitable aircraft, they are concentrating on operational incentives. They actually lose leverage of trying to renegotiate CPAs in bankruptcy because of the boiler plate bankruptcy clauses in the CPAs.
1). Duh, of course it would harm the holding company.
2) Right, it's with the CPAs...Now, if they company can't renegotiate better rates with United then what do they do? They come after the labor group to cut costs. They can control labor costs through bankruptcy, they can't necessarily control the CPA once it has become a problem. They cut costs with vendors, hotel contracts, labor groups, bank loans, unfavorable aircraft lease deals..etc....all done through bankruptcy.
3) They could very well leave the CPAs in tact in bankruptcy if they were able to cut costs elsewhere.
I"m not saying they will declare bankruptcy but don't think for a second that a large company that is losing money every single quarter won't do what they need to to fix the problem. It's happened at SO many other airlines. You're not immune.