fcoolaiddrinker

labor cost don’t cause bankruptcies in general. However, f9 fapa structured pay concessions taken in bankruptcy into equity in the company. It was incorporated into the ch 11 plan to emerge from bankruptcy. Fapa became a secured creditor along with all the other creditors (Airbus, ge, leasing companies, ect.). The value (% of company) of it was the value of the concessions taken at the time and by some miracle (valuation was done 2 months prior to Covid) it paid back close to 100%. Now I’m not suggesting this at all right now. It’s more of a potential card to play in bankruptcy for unions in general. I believe This is how some legacies and others secured profit sharing plans in bankruptcy? It’s pretty much the same concept but turns into a one time payment instead of profit sharing indefinitely which imo is preferable.

NuGuy

If you really feel it's going down the tubes, watch for the signs. It usually starts with long entrenched management and/or their dudebros picking up and leaving. Their departure is usually heralded by "leaving to pursue other opportunites" or "spending more time with familiy" or similar non-sense. Also watch people close to management that have personal good deals going (chief pilots, senior checkairmen, program managers, etc) for themselves. Their bros will hook them up and clue them in, and if they see the writing on the wall, they won't wait despite being dialed into a good deal, because they've got a heads up it's not going to last. Most of these people will not willingly walk away from a good deal, so if they split, it's for a good reason.

Both Braniff and Eastern, and to some extent PanAm, had alot of seniority inversion going on, but it depended on the circumstances. If you're carrier goes bust in a recession, you want to be first out the door to grab what few jobs are out there. If not, you want to bail to other places to before the tidal wave begins. The first people furloughed were also the first people to grab the jobs that were out there. As the suck spiraled down, the people who were trying to ride it out started to bail, and they wound up junior to the FOs or FEs that jumped or were furloughed.

Generally concessions prior to bankruptcy isn't going to help. Whatever marginal savings they squeeze isn't going to make a bit of difference. What will happen is when BQ finally does happen, they're going to come back to the till and ask for concessions on top of whatever concessions you already gave them. You might as well start from the high water mark and keep a few coins in
your pocket in the interim.

rickair7777

This has generally been true. Maybe a few cases where BK was averted, but the historical odds don't favor concessions.

Although I don't recall many big airlines other than AMR (too big to fail) filing ch.11 under the new (post-2007?) rules. That might get ugly fast, compared to in the past.

Cyio

What changed after 2007 regarding to how airline BK’s would be handled? Serious question as I’m ignorant to what happened.

PNWFlyer

https://www.jonesday.com/-/media/fil...ember-2007.pdf

fcoolaiddrinker

The pension protection act helped facilitate moving from a pension system to a 401k system for retirement. This took away some incentive to declare bankruptcy in an attempt to get out of future pension liabilities which are hard to quantify on a balance sheet. Point is it wasn’t just one factor that made bankruptcy less likely.

SoFloFlyer

The slow in hiring isn’t from wage gains though. Aircraft delays, engine problems, artificial growth in cargo during Covid and correcting itself now, and at some point, airlines will need to slow hiring. A company can’t hire 2000 people a year forever. DL started hiring pretty aggressively a year or two before everyone else. Their slow down is expected.

The sky certainly isn’t falling, but I believe the dust will start to settle here in the next 5 or so years.

BobSacamano

I didn’t claim that it was. I was just saying how it’s always boom times before it isn’t. That’s all.

SSlow

Tell me you haven't worked in aviation for more than a few years without telling me you haven't worked in aviation for more than a few years...

Like the other poster said, it's boom and bust. Completely normal.

Anyone who's been flying since before Obama was president gets it

SoFloFlyer

Where am I wrong though? Nothing I said is incorrect with one opinion stated at the very end. If maybe you kept up with the news in industry instead of coming after people all the time you would know better. Anything can happen in this industry, not saying it can’t. But unless another black swan even happens, it’ll be okay.