British Airways slams U.S. bankruptcy laws
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chornedsnorkack ...there is a little known taxpayer liability: It's when bankrupt (Chapter 11) carriers are relieved of pension payments. The taxpayer supported Pension Benefit Guarantee Association partially subsidizes failed pension plans...
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For any BA official to make a criticism about US protectionism is hypocrisy of the highest order. BA has been fighting giving access to Heathrow for US carriers for years. Can't BA compete against US carriers without protection from the British government?
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And what will the US carriers offer in return for access to LHR? Absolutely nothing, thats what. You'll get more access when you allow BA more access to the USA market by removing your archaic foreign ownership regulations. In the meantime you'll just have to suffice with your two biggest airlines having access to LHR., one of which is bankrupt and shouldn't be in existence. With all that Chapter 11 money sloshing around in the US i think Bermuda II is a damn good idea right now.
Paxing All Over The World
To elaborate slightly:
US carriers can take pax from LHR and then connect them onwards to any of a thousand airfields in the USA. British carriers can only fly them to their normal staging point. Then they must offload them on to local carriers. US carriers can offer pax a multi-sector 'rover' ticket around their country, which UK carriers cannot.
As the UK is not quite as large as the USA, there is lot more business for the US carriers. I sit to be corrected.
BA has been fighting giving access to Heathrow for US carriers for years.
As the UK is not quite as large as the USA, there is lot more business for the US carriers. I sit to be corrected.
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Glassos
BA may be against allowing US carriers LHR access,but they have absolutely nothing to do with the decision making.
When the UK and US resolve their joint access agreements,I guess BA will be made to give up/sell some of their slots,as there aren't any slots vacant.
BA may be against allowing US carriers LHR access,but they have absolutely nothing to do with the decision making.
When the UK and US resolve their joint access agreements,I guess BA will be made to give up/sell some of their slots,as there aren't any slots vacant.
"BA may be against allowing US carriers LHR access,but they have absolutely nothing to do with the decision making"
I think that under estimates the power BA wields. Sme can be said here of the cat fight between AA and WN over luv field restrictions.
I think that under estimates the power BA wields. Sme can be said here of the cat fight between AA and WN over luv field restrictions.
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Pensions
Ah, that.
Does it mean that US pension system subsidizes any business that fails and also provides a free loan to any startup business? That is, a business has to pay the entire pensions until it is bankrupt - at which point the taxpayers pay the pensions of the bankrupt businesses but the good businesses still owe the pensions of their retirees - and also, a startup business can not worry about paying pensions until their workers start retiring?
Does it mean that US pension system subsidizes any business that fails and also provides a free loan to any startup business? That is, a business has to pay the entire pensions until it is bankrupt - at which point the taxpayers pay the pensions of the bankrupt businesses but the good businesses still owe the pensions of their retirees - and also, a startup business can not worry about paying pensions until their workers start retiring?
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Agree with comments over over capicity but how can a legacy carrier fail when the majority of major creditors are the aircraft manufacturers or major suppliers finance arm.
GE Capital has supported most of the majors, Boeing Capital has too, of course its in their intrests to do so but at what cost to the airline industry both to those operators that compete with the legacy carriers but do so not on level terms.
GE Capital has supported most of the majors, Boeing Capital has too, of course its in their intrests to do so but at what cost to the airline industry both to those operators that compete with the legacy carriers but do so not on level terms.
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And I quote...
"For any BA official to make a criticism about US protectionism is hypocrisy of the highest order. BA has been fighting giving access to Heathrow for US carriers for years. Can't BA compete against US carriers without protection from the British government?"
Is it me, or didn't the US government also sign up to the Bermuda agreement as well as the British government?
Blame your own guys....
"For any BA official to make a criticism about US protectionism is hypocrisy of the highest order. BA has been fighting giving access to Heathrow for US carriers for years. Can't BA compete against US carriers without protection from the British government?"
Is it me, or didn't the US government also sign up to the Bermuda agreement as well as the British government?
Blame your own guys....
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S'funny that Rod forgot BA's own history when their debts of (I think two billion) were written off and they were given free Concordes with subsidies for the operation.
Without the tacit support of HM Government they would have failed several times over in the 70's and 80's.
Various managers turned what was known as Britain's flying National Debt into a viable concern. But what a leg up they received compared with say, Virgin.
Without the tacit support of HM Government they would have failed several times over in the 70's and 80's.
Various managers turned what was known as Britain's flying National Debt into a viable concern. But what a leg up they received compared with say, Virgin.
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1, Bankruptcy in the US operates as a safe harbor that allows a financially strapped business to get temporary protection from their creditors while they reorganize, on the basis of the idea that more value for creditors, stockholders and employees can come out of a going business that's been reorganized than from one that's forced into dissolution. Sometimes it works, sometimes it doesnt.......like in TWA's case.
2. Bankruptcy is available to foreign carriers-it's as simple as filing incorporation papers in any state in the US....I will do that for you for $100 plus the filing fee. Quite a number of foreign companies have US based subsidiaries....so if you didn't move to take advantage of that and you needed it, whose fault is that?
Why, it's your corporate lawyers, that's who.
3. Eddington is way off base.
He makes an argument that is self interested and uninformed. The gist of his argument seems to be twofold:
First that Chapter 11 keeps airlines in business that would otherwise be liquidated. That's wrong, but in the event that DL, UA, NW and whoever ARE unable to continue, they WILL be liquidated like TWA was.
Second, he argues that US airlines have "soaked up 15-20 billion in public subsidies and loan guarantees and they still can't make a profit." No basis is given for these assertions.
4. He argues that chapter 11 is used as a form of state aid that keeps unprofitable airlines around, bloating capacity and depressing prices on North Atlantic routes....which is, I suppose, what really gripes him. He wants to jack up fares but can't see his way through to doing it as long as zees devilish Americains are screwing everything up for him and his pals.
5. As a practical matter nothing Eddington says is going to change law and legislation here in the States. We've had bankruptcy law for a long time, and it works well in terms of returning the most value to creditors, employees and shareholders by salvaging a company that's having cash flow problems...dissolution of businesses that can be salvaged is not good public policy here or anywwhere else in the world.
And, in fact, speaking in the long term, anything that returns more value to the stakeholders than they'd get in a dissolution is good policy. You can always dissolve a company if it can't survive. You should try it.
Eddington needs to remember that the USA is the land of opportunity and fresh starts. Unlike Britain, the USA never had debtor prisons.
LHR is one of THE most protected markets in the world and BA is the prime beneficiary. Open up LHR to all airlines with slots awarded in an auction and let's have fair competition....pigs will fly first.
So, you gotta ask why he's making with the big show?
And let\'s not forget BA are deep in a financial rut themselves, owing several billion pounds even though they brag about some profit.
2. Bankruptcy is available to foreign carriers-it's as simple as filing incorporation papers in any state in the US....I will do that for you for $100 plus the filing fee. Quite a number of foreign companies have US based subsidiaries....so if you didn't move to take advantage of that and you needed it, whose fault is that?
Why, it's your corporate lawyers, that's who.
3. Eddington is way off base.
He makes an argument that is self interested and uninformed. The gist of his argument seems to be twofold:
First that Chapter 11 keeps airlines in business that would otherwise be liquidated. That's wrong, but in the event that DL, UA, NW and whoever ARE unable to continue, they WILL be liquidated like TWA was.
Second, he argues that US airlines have "soaked up 15-20 billion in public subsidies and loan guarantees and they still can't make a profit." No basis is given for these assertions.
4. He argues that chapter 11 is used as a form of state aid that keeps unprofitable airlines around, bloating capacity and depressing prices on North Atlantic routes....which is, I suppose, what really gripes him. He wants to jack up fares but can't see his way through to doing it as long as zees devilish Americains are screwing everything up for him and his pals.
5. As a practical matter nothing Eddington says is going to change law and legislation here in the States. We've had bankruptcy law for a long time, and it works well in terms of returning the most value to creditors, employees and shareholders by salvaging a company that's having cash flow problems...dissolution of businesses that can be salvaged is not good public policy here or anywwhere else in the world.
And, in fact, speaking in the long term, anything that returns more value to the stakeholders than they'd get in a dissolution is good policy. You can always dissolve a company if it can't survive. You should try it.
Eddington needs to remember that the USA is the land of opportunity and fresh starts. Unlike Britain, the USA never had debtor prisons.
LHR is one of THE most protected markets in the world and BA is the prime beneficiary. Open up LHR to all airlines with slots awarded in an auction and let's have fair competition....pigs will fly first.
So, you gotta ask why he's making with the big show?
And let\'s not forget BA are deep in a financial rut themselves, owing several billion pounds even though they brag about some profit.
Too mean to buy a long personal title
unmanned transport: And let's not forget BA are deep in a financial rut themselves, owing several billion pounds even though they brag about some profit.
Just what is BA's debt history over the last 5 years?
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Second, he argues that US airlines have "soaked up 15-20 billion in public subsidies and loan guarantees and they still can't make a profit." No basis is given for these assertions.
I suppose you also failed to notice - unmanned transport - that many profitable companies in your country too are peeved with C11 rules, to the extent that the rules are changing this year. So much so that the recent entries to C11 prove that the current system props up carriers needlessly, since Northwest and Delta so shamelessly sought such protection prior to the rule changes to ensure that they will be subject to the more leniant rules of the current C11.
C11 is a shameless protection for management whos time has come, yet it allows them to continue operating while under administration in any other country the creditors themselves would seize the company and operate it under an administrator if it were worth doing so.
Such a scam that allows the 'failed' management not to lose their jobs, and to continue bleeding money from creditors and eliminate (effectively) the prior shareholders is nothing short of anti-competitive rubbish that will not last in a free market.
If you want to preach free market, then accept what it does to you.
Dissolution of a business that can be salvaged does not happen elsewhere - the administrator takes care of that. What happens under C11 is life support for a business that often cannot be salvaged. Under normal circumstances United would die. How can you not see the pain that it is causing the market by keeping it alive.
You might cry for the jobs, painful as it is to lose one - but maintenance of United for example in this limbo is more painful for the whole job market and indeed the whole aviation market.
How can operating with greater than half of capacity under BANKRUPTCY PROTECTION be good for the largest 'free market' in the world?
The global economy is at it smost buoyant at the moment and - aside from the high fuel prices - the airlines still cannot make a profit. What sort of market do you want if you don't let the failed actually die.
