Originally Posted by
NVUS
The CRJs that have contracts due to expire over the next 16 months will not have any of their current contracts extended. However, that doesn't mean they won't find new contracts for them. But the ERJs are completely toast.
Only the CRJs that have tail risk for Skywest, right? Are you talking about pro-rate? I always wondered why Skywest was hogging that flying up (not really) but I'm glad they are now giving some scraps to the ASA guys.
Originally Posted by
AlaskaBound
Back in the day at Pinnacle they touted "No bankruptcy is in the works" up until the day they declared bankruptcy. Of course they aren't going to forecast a bankruptcy. That would be harmful to the company if an executive said "yeah, we're thinking bankruptcy might work out well for us down the road...we aren't sure though".
Originally Posted by
AlaskaBound
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.
Yes, and they said they have done their due diligence on this. And there are restructuring people in ATL as well. We went through this once before at xjt. They bring in a hired gun to restructure the company outside bankruptcy. In bankruptcy, management loses a lot of control. Nothing is a slam dunk case. Each stakeholder (vendors, lease holders, unions, etc) are vying for a piece of the Inc pie. The restructuring plan needs to be approved by the creditor'a committee and the judge. It's not solely up to Inc in what the restructuring plan is going to be. American Airlines (and even PNCL) are perfect examples of restructuring plans gone awry. AA ended up being forced into a merger with Airways and PNCL ended up being owned by DAL. This is a huge risk to take when your whole point of bankruptcy protection is to cut costs while having a perfectly viable entity into which to merge into.
Trust me, especially Inc, does NOT want to hand over ANY decisions over to a third party who does not solely have Inc's best interest. Which, coincidentally, is the same reason why they bought xjt when they did rather than to wait and possibly have to deal with a judge and creditors committee.
To me, this was made pretty clear on the call. And it makes sense. They are already restructuring by parking the money losing airplanes. And that's the biggest issue here, not all those costs. The costs are really not that out of line. It's the revenue side from crappy CPAs management signed off on.