American Airlines files for bankruptcy

[daveinspain]

They filed because they can...

[Guest farnsbarns]

Not quite. They've requested chapter 11 protection from creditors. Many airlines in the US are under chapter 11 and have been for years. It's no big thing in it's self.

[damian]

I'm well versed in labor law..........Among other things, it's an easy way to drop pension plans......Clever and legal......

[rct]

Not quite. They've requested chapter 11 protection from creditors. Many airlines in the US are under chapter 11 and have been for years. It's no big thing in it's self.

 

It is a big thing. It used to be shameful to bankrupt ones business. It used to mean something when you ran a business through tough and lean times. It used to mean something to earn a modest 12%, reinvest it in your company, retain employees, all that dumb old passe crap from the black and white analog days.

 

Now you just borrow, pay all the top end whatever they want for a good 7 years, run the underlying business into the mud and cows hit, declare bankruptcy, take another few million each for the top end, bail out. It's a disgrace.

 

Next month, try telling your creditors you'd like to give them 2 cents on the dollar, you would like them to be happy with that, and you would like them to line up to lend you a few tens of millions more when we get done with this pesky bankruptcy thing. Let me know how that works out for you.

 

rct

[Thundergod]

It is a big thing. It used to be shameful to bankrupt ones business. It used to mean something when you ran a business through tough and lean times. It used to mean something to earn a modest 12%, reinvest it in your company, retain employees, all that dumb old passe crap from the black and white analog days.

 

Now you just borrow, pay all the top end whatever they want for a good 7 years, run the underlying business into the mud and cows hit, declare bankruptcy, take another few million each for the top end, bail out. It's a disgrace.

 

Next month, try telling your creditors you'd like to give them 2 cents on the dollar, you would like them to be happy with that, and you would like them to line up to lend you a few tens of millions more when we get done with this pesky bankruptcy thing. Let me know how that works out for you.

 

rct

 

 

I agree. There's nothing more devastating for the economy than people finally falling for the "it's no big deal" thing.

[saturn]

Yep. I spent many years working for an airline. Glad to be out of that mess.

 

One of the biggest loser's in this deal will probably be the retirees.

 

One thing I disagree with in that article is the prediction of the death of "hub and spoke" carriers. Even an airline like Southwest could never serve all the cities in the country by just flying point-to-point. Airlines like SW do what they do well, but they only serve a fraction of the cities that the "legacy" carriers serve. I don't know how the small airports could get service without funneling people through "hubs".