Chapter 11 is a purely US regulatory law, allowing for protection from creditors, based on the concept that it is better for all parties for a company to recover and pay it's creditors, rather than dissolve and everybody losing.
The question that has to be resolved is the effects of a Chapter 11 filing in the Cayman Islands, as this is the group domicile. Additionally, the global aspects of the organization have to be addressed, with the specific laws for each relevant company. I posed this question some time ago, as I don't understand the complexities of an international action such as this.
Chapter 11 does allow for Labour and other contracts to be completely renegotiated, in the interests of maintaining the continued business operations and activities of the organization. In this instance, employees would probably choose to be employed with reduced pay and benefits, rather than be thrown out of work, in the middle of a massive downturn in the industry. Likewise; leasing companies and others would probably prefer the long term survival of the group, to having a vast inventory of non producing assets (including very recent S&LB deals) and a shake up that would probably cause a severe adjustment to the marketability, demand and rates for their aircraft. A buyer's market is not in their interests.
As 26500 accurately observes, this company is bleeding massive amounts of money and there is a very definable and calculable absolute zero here.
To put this in perspective, review the financials and try to find the quarter or the year when profits ever came close to the current losses. EBITAR numbers are in the low dual digits if you are lucky. Recovery from the current situation would take decades based upon the typical earnings, and that is without ever considering the cost of the ever increasing cost of servicing debt.
Having been involved in a number of Chapter 11 and other bankruptcies, I don't envy the hard work ahead of this management team. Their discipline and ordered approach should be commended.