On a second read, this was in relation to the original filing for DIP financing, not the objection that is to be heard tomorrow. Interesting, however, that the creditors committee has made no filing in regard to the financing. Wonder if they will have objections to Delta's terms as well.

 

Probably. Unless one of the creditors feels they can get more of a return out of a liquidation. But I would have thought the 9E and Delta management would have been smart enough to talk to the other creditors and equity holders first to prevent the filing of a motion like this. All it takes is one the derail the whole train.

 

Does anyone know where or how to find the future fleet plans in the bankruptcy filing? I don't know how set it stone it might be, but I'm pretty sure there has to be something in there about future fleet plans....

 

I was trying to avoid mentioning politics, but, yes, Obama's administration did stick it to the bond holders. Having said that, the federal judges who reviewed the agreements accepted what had been done.

I just don't see Chapter 7 as a possibility. There would be a long reduction in capacity because other airlines would take some time to take over the planes and staff them. It would be a disaster for Delta and I think Delta, if it fears a loss, will quickly move to renegotiate. In fact, that might be why today's hearing was delayed.

 

Wasn't the loan interest rate around 12.5 percent. Maybe they are trying to negotiate for a lower rate if that's possible. If the rate is that high its almost like they financed the ability to continue operations on a best buy credit card.

 

Reductions in capacity, the effect on Delta, and staffing will have nothing to do with the judge's decision. Bankruptcy case law will, and how much is screws everybody over will not be a consideration.

It will not be a disaster for Delta. I have been through this kind of thing before. There will be guys in reservations that will route these passengers around just like I did in 2001 (and during the NWA strike in 1998). Delta has been preparing for something like this since the Comair strike in 2001. They have very carefully ensured that all routes have more than one connection carrier assigned to them and that no connection carrier dominates a hub. That was the lesson Delta learned in 2001 when Delta lost all regional feed to its second largest hub (at the time). People were re routed through other hubs and onto other airlines. This happens all the time. It was a pain for a month or so, but once the adjustments were made Delta rolled right along until the Comair strike was settled. In fact Delta had started to replace some of the flying with Mesa 1900s as a codeshare when the strike settled.

The industry and Delta will be fine if 9E liquidates. Delta will have to make some adjustments until the 9E flying can be covered, but it will not cause Delta a great deal of difficulty. Obviously they would prefer to keep 9E flying, but I guarantee they have a plan in place for a 9E shutdown.

That being said I will be surprised if the investors, 9E management, and Delta do not come up with some kind of deal to keep all parties happy and prevent armageddon for 9E. The investors and creditors want to get as much of their money out of this as they can, and I don't think they will choose a course that could lead to liquidation.

 

I don't think it'd be impossible...I'd think the DC-9s parked in the desert could get them through it

 

^^^^Why everytime you go to an outstation, there's a mix of ASA, Comair, Pinnacle, Compass, etc. planes out on the tarmac.

Everyone already knows this, but for any rookies out there, know that the "Delta Shuffle" isn't just a manifestation of sadistic corporate impulse--it's a calculated risk hedging strategy that ensures Delta will continue operating without a hiccup in the event of any sort of sanctioned or unsanctioned loss of labor/planes/regional corps/etc...

I recall a line from that film "Contact"--"Why build one when you can have two for twice the price?"...except in this case, it's "Why pay for one feeder when you can have 5, and strategically bankrupt them every now and then because they're all too ignorant/selfish/irrationally optimistic to ever push for a national seniority list."

 

As per several (very) recent Flt Ops emails Delta is actively looking at reducing 50 seat rj flying. We are also adding M90's and eventually 737-900ER's. I'm surprised nobody mentioned this, but how might this factor into the equation? I think Delta has easily positioned itself to absorb this flying.

 

Very strong rumors of acquiring 88 B717's as well.