What pieces exactly? Everything is leased. There’s nothing to sell. There are very few hard assets worth money in a liquidation. This is exactly why the bond holders already agreed to equity in place of their $2billion in debt. They are also putting up cash to move forward. There is a next to zero chance spirit is sold into pieces. It only has value as a complete enterprise which is why the bond holders are on board already for this prepackaged bankruptcy

Sold yes but not in pieces

 

What NK has done that F9 has not:

-heavily leveraged the business
-bought and operated older airplanes
-didn't have Indigo's purchase power advantage when ordering new airplanes
-has not, until recently, been taking advantage of SLB transactions
-operated a higher percentage of smaller airplanes
-operated a smaller percentage of NEO airplanes
-lost the coin flip when opting for P&W NEO airplanes
-built a multi-hundred million dollar new corporate campus
-spent millions on multiple failed mergers

 

Gates and slots may have value, but those are often allocated by local airport authorities. They are usually owned by the locality, and lease terms/assignment terms may not transfer. Ie the gate tenant may not be able to transfer or sublet their gate access. Local authorities like to reserve that control for themselves, to best optimize air service to their communities' best interests.

With no detailed information the obvious broad strokes situation with NK is that they have a lot of debt and few assets.

Most or all remaining planes are leased. Those don't count, other than NK *must* keep making payments or the planes get repo-ed. The court can stall that for a short time only, but the court cannot impose any new terms on the lessors that they didn't agree to.

So you're right, the creditors' best option is that NK survives (better yet merges) so as to be able to hopefully continue to service the debt.

It also doesn't look good for stand-alone survival, not saying they absolutely couldn't re-organize to profitability but they'd need time, operating cash, and debt relief to get there. Where would that cash comr from? More debt? they would be at least somewhat more credit worthy after exiting Ch.11 but that's relative, doesn't mean finance people would be falling all over themselves to send good money after bad.

M&A looks like the best plan, and F9 is the girl with low-cut dress and mini skirt who ended up alone by herself in the corner. "Wanna Dance?" But of course the girl doesn't absolutely need to dance, she can make sure he's got the beer and rubbers in his the car before agreeing to anything.

 

Lol, you arent stapling anyone.......

 

Yeah stapling won’t happen due to ALPA merger policy but Spirit pilots will get nothing close to the SLI they would’ve had, had the original F9 NK merger went through.

 

The only definte in a merger is that anyone who thinks they defintely know what will happen are talking out their butt.

 

Any NK pilot on furlough or on notice at the announcement of any merger won’t be finding themselves with an SLI awarded position above an actively employed F9 pilot, but it’s nice to have the option of employment for those furloughed pilots; most of whom I’m sure have found employment somewhere else. At this stage I agree it’s far from the near-painless SLI we were looking at a couple years ago. If a merger now happens, I’m not looking forward to the decade long squabble between pilot groups.

 

"Career expectations" seem to carry little weight when comparing actively employed pilots in the same category (ie narrowbody). That will pretty much go down by relative list position plus longevity credit if there's a significant longevity disparity between the lists (ex AS + VX).

Career expectations seems to mean mostly category and seat, rather than corporate financial situation. This has been discussed ad naseum re. the AS/HA merger. Longevity, relative seniority, seat, and equipment are all objective facts, easy to quantify. It's much harder to quantify "Bu Bu Bu we saved you from liquidation!".

My SWAG would be furloughs get stapled, everybody else gets slotted in by relative position with some longevity seasoning. Silver lining for F9 pilots is that higher longevity NK pilots who are now at the bottom of the list (due to furloughs) will likely end up below F9 pilots with similar DOH who are further up their own list.

Asssuming similar longevity distribution on both lists.

 

My take as well.

Which is why I mentioned I don't want to be at an airline that staples anyone. It's lose lose for everybody. I knew/know a lot of prior UA/ex-CON pilots who still hate one another and have heard stories of cockpit tension/animosity like no other. To me, the extra few slots of seniority wouldn't be worth it. It'd be like tryin to say hi to a Delta FA in passing...

It appears an actual merger (in the M&A sense) isn't happening but I'd be surprised if Spirit just went away w/o an attempt by F9 to gain some sort of advantage from it.

 

agreed, stapling won’t happen to active pilots. I disagree with the second part though. While I do agree that the furloughed pilots will probably get stapled, I also believe that active pilots have a good Chance of being integrated fairly on a list. I’ve read through the entire merger policy, I don’t believe active spirit pilots will be total EFFED on an SLI.