Re: Industry Changes

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How would it have put the airilnes in a stronger position?  Basic economics - less airlines, less competition, higher prices for the consumer.
Chapter 11 is a way out for companies.

-------------- Original message --------------

> The Euro's don't think so. They only know Chapt 7. My position is that the
> elimination of a Chapter 11 in the airline industry would have put US carriers
> in a much stronger position today.
>
> CO's protracted and abusive bankruptcies went a long way to developing much of
> today's pricing irrationalities in the name of market share.
>
> damiross3@xxxxxxxxxxx wrote:
>
> A bankrupt airline could be liquidated - it all depends on the type of
> bankruptcy declared. Chapter 11 allows a business to continue operating while
> it reorganizes. Chapter 7 is liquidation. Chapter 11 is a good idea - it gives
> the business a second chance to be profitable.
>
> David R
>
> -------------- Original message --------------
>
> > CO could also be said to have abused the state of Chapter 11 to the extreme
> > detriment of the entire market. Operating for YEARS under cost in an attempt
> to
> > recoup market share totally pushes the envelope of what bankruptcy is supposed
> > to do. It is not supposed to reshape a market.
> >
> > Reminder to all observers that in Europe, when you become insolvent, your
> ticket
> > is immediately pulled. Consequently, Euro-carriers cannot plan to file
> > bankruptcy as a "what if" scenario in their marketing plans. Bankruptcy is the
> > end of the operation, and they do indeed behave very differently than US
> > carriers because of this restriction on a company living beyond it's means.
> > Just one reason why Euro-fares are inherently different and will remain so for
> a
> > long time to come.
> >
> > You wonder what US airfares would look like if carriers equated "bankruptcy"
> > with "liquidation." Methinks you'd see fewer irrational fares.
> >
> > Douglas Schnell wrote:
> > CO benefits mightily from cost savings imposed during its two trips to
> > bankruptcy in the early 90s. In that sense, they could be said to have
> > extreme foresight.
> >
> > They also have made a conscious decision to focus on business travelers as
> > their core market, another decision that seems to be paying dividends.
> >
> > -----Original Message-----
> > From: The Airline List [mailto:AIRLINE@xxxxxxxxxxxxxxxxx] On Behalf Of
> > Alireza Alivandivafa
> > Sent: Monday, September 27, 2004 11:51 AM
> > To: AIRLINE@xxxxxxxxxxxxxxxxx
> > Subject: Re: Industry Changes
> >
> > I think CO is a good example of a legacy carrier that is treating its
> > employees decently, offering good fares and keeping up service with things
> > like meals on longer (and I mean over 2 hours) flights and the like. They
> > have a seat-mile cost around that of WN according to recent measurements,
> > mostly because they do things in house. They do their own catering (decent
> > too) and keep their costs way down. A cool enough concept that I have
> > Onepass now and am considering going elite on them next year (as I fly a lot
> > more now).
> >
> > > find a way to do that, they are going to continue to have hard times. I
> > suspect that most people don't care that they don't get the bad airline food
> > anymore. I for one am not about to choose what airline I fly based on
> > whether or not they serve food. I think BAHA, you are the exception to the
> > rule here.>>
> >
> >
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