British Airways slams U.S. bankruptcy laws
PPRuNe FirstOfficer
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British Airways slams U.S. bankruptcy laws
"Sir Rod Eddington on Thursday used his last public speech as British Airways chief executive to berate the U.S. for its use of "protectionism" to prop up failing domestic airlines."
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BA Slams US bankruptcy laws
"America, the land of the free, is turning itself into the land of the free ride," he said.
BA Slams US bankruptcy laws
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"Lame Duck" in what way exactly. He has seen BA through Sept 11, SARS and managed to keep us in profit, whilst most other airlines have either gone bust, chapter 11 or made severe losses.
What is morale like at the American carriers at the moment? Must be tough. Seen quite a few new paint schemes though!
What is morale like at the American carriers at the moment? Must be tough. Seen quite a few new paint schemes though!
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... My point being , that he`s out of the game , now it`s Willies to mess up. Unless and until Sir Rod becomes head of ICAO or IATA , ( read , not gonna happen ) post BA , nothing will be accomplished on this issue , nothing. Do you think the USA is listening , well perhaps maybe , but effect change on Chapt 11 to suit the rest of the world ? ha ha
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The Airline Industry is one of the few things, where the USA should learn from the rest of the western world. As a passenger, I passionately dislike to fly on any of the US Airlines, maybe with the exception of Jetblue. The service is virtually non existent, and the domestic business class travel is a total joke.
The irrational dumping of Ticket prices led to airline travel, being a commodity. Anyone in business knows, that commoditization means more volume with much less profitability. In this case, more volume means more queues and (sometimes rather unbearable) hassles at the airports.
The traditional high yield business passengers rather use private jets - fractionals, such as Netjets, etc. to move around - leaving the rest of the seats to low yield bargain seekers.
As the result the management has a volume driven objectives rather than Service driven. That's where the vicious cirle closes. More Volume, less business pax, less yield...the flight crews work more for less...and at the end, may even lose their jobs.
My guess is, that things will get much worse, before they get better. At least one or two of the majors has to close down for good, so to take some significant capacity out of the system.
Once the pricing power of the remaining airlines is restored, it should become better. It is true that then flying may not be accessible to everybody, but not everyone should be allowed to travel on Airplanes (IMHO).
Sometimes, less is more.
The irrational dumping of Ticket prices led to airline travel, being a commodity. Anyone in business knows, that commoditization means more volume with much less profitability. In this case, more volume means more queues and (sometimes rather unbearable) hassles at the airports.
The traditional high yield business passengers rather use private jets - fractionals, such as Netjets, etc. to move around - leaving the rest of the seats to low yield bargain seekers.
As the result the management has a volume driven objectives rather than Service driven. That's where the vicious cirle closes. More Volume, less business pax, less yield...the flight crews work more for less...and at the end, may even lose their jobs.
My guess is, that things will get much worse, before they get better. At least one or two of the majors has to close down for good, so to take some significant capacity out of the system.
Once the pricing power of the remaining airlines is restored, it should become better. It is true that then flying may not be accessible to everybody, but not everyone should be allowed to travel on Airplanes (IMHO).
Sometimes, less is more.
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Profit or not , I just happen to think it`s a little late in Sir Rod`s tenure to be making comments that he has no intention to elaborate or follow up on . Perhaps it was done to merely stir the pot , well maybe we both have something in common there...
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He doesn't need to elaborate, enough said.
As for following up, it is for the folks that the comments were made against to respond (which there will undoubtedly be a deafening silence).
As for following up, it is for the folks that the comments were made against to respond (which there will undoubtedly be a deafening silence).
Last edited by goshdarnit; 24th Sep 2005 at 15:00.
I don't think there is a monoply on trying to restructure entities that are a significant part of your industrial and economic base.
In the U.S., Lockheed and Chrysler come to mind, and of course lest we forget,
Rolls Royce,
"Early problems with the RB211 forced the company into bankruptcy - and ultimately, state ownership"
Surely Rolls Royce was worth restructuring.
In the U.S., Lockheed and Chrysler come to mind, and of course lest we forget,
Rolls Royce,
"Early problems with the RB211 forced the company into bankruptcy - and ultimately, state ownership"
Surely Rolls Royce was worth restructuring.
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Bankruptcy
Yes, British government bailed out Rolls-Royce.
But when a government outside US bails out a business in trouble, the money comes from taxpayers - the government and legislature, being entitled to find best application to taxpayer money, decide to put it there.
Whereas, in a Chapter 11 bankruptcy, the money comes from creditors - the government lets the business continue and forces the creditors to do without money owed to them.
So, where are the creditors of Delta and NW?
But when a government outside US bails out a business in trouble, the money comes from taxpayers - the government and legislature, being entitled to find best application to taxpayer money, decide to put it there.
Whereas, in a Chapter 11 bankruptcy, the money comes from creditors - the government lets the business continue and forces the creditors to do without money owed to them.
So, where are the creditors of Delta and NW?
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Its kind of de-regulation without the de-regulation. Alfred Kahn must be "turning in his grave".
As I understand, one of the catalysts for the 1978 De-Regulation Act was that the US Government didn't relish the prospect of bailing out the airlines like they did Penn Central in what was, at the time, the worlds largest corporate bankruptcy.
Chapter 11?
It ought to be Chapter 7. Thats obvious.
Its time to reduce ASK's towards RPK's.
The way the legacy carriers go on I can't figure out why anyone would want to be one of their creditors anyway.
As I understand, one of the catalysts for the 1978 De-Regulation Act was that the US Government didn't relish the prospect of bailing out the airlines like they did Penn Central in what was, at the time, the worlds largest corporate bankruptcy.
Chapter 11?
It ought to be Chapter 7. Thats obvious.
Its time to reduce ASK's towards RPK's.
The way the legacy carriers go on I can't figure out why anyone would want to be one of their creditors anyway.
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One of the American carries needs to go. If they don't make money why support them? Thatcher said to BA in the 80's, sink or swim but your not going to be bailed out anymore.
Someone needs to say the same to the US carriers. There is too much over capacity in the US constantly driving air fares down meaning the situation is going to grow worse.
Once a big airline goes, the capacity will be reduced meaning air fares increase and perhaps the airlines can start to make money again.
It will be interesting to see how what Eddington would say if BA's partner airline AA filed for chapter 11. I reckon AA mighr be considering it with NWA, Delta and United all in chapter 11 ignoring their creditors.
Someone needs to say the same to the US carriers. There is too much over capacity in the US constantly driving air fares down meaning the situation is going to grow worse.
Once a big airline goes, the capacity will be reduced meaning air fares increase and perhaps the airlines can start to make money again.
It will be interesting to see how what Eddington would say if BA's partner airline AA filed for chapter 11. I reckon AA mighr be considering it with NWA, Delta and United all in chapter 11 ignoring their creditors.
Paxing All Over The World
it`s a little late in Sir Rod`s tenure to be making comments that he has no intention to elaborate or follow up on.
It was not too late, it was the only time it could be said, as it saves Mr Walsh having to say it. No it will make no difference but it is another brick in the wall.
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The way the legacy carriers go on I can't figure out why anyone would want to be one of their creditors anyway.
The Odd One
PAX, I seem to remember Robert Crandall, when he was CEO of American, saying that in his opinion freedom to compete should also mean freedom to fail. This was in a speech where he was critical of corporations being able to avoid shutdown via Chap 11.
Guess it depends to some extent if it your Ox that is being gored.
Guess it depends to some extent if it your Ox that is being gored.
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The Odd One,
I doubt its a unique occurence but I believe MAN airport authorities once impounded a RyanAir a/c for non-payment of fees.
Whilst you may be subsidizing their operation, from a capital investment point of view, who are the big creditors?
As I understand, we know that there is a reluctance from the commercial banking sector these days to fund asset acquisition because the operating economics of large commercial aircraft and the initial outlay they require makes designing a financial instrument that meets everyones objectives difficult.
Whereupon, who is daft enough to want to get involved? The Sage of Omaha doesn't which is good enough for me.
I doubt its a unique occurence but I believe MAN airport authorities once impounded a RyanAir a/c for non-payment of fees.
Whilst you may be subsidizing their operation, from a capital investment point of view, who are the big creditors?
As I understand, we know that there is a reluctance from the commercial banking sector these days to fund asset acquisition because the operating economics of large commercial aircraft and the initial outlay they require makes designing a financial instrument that meets everyones objectives difficult.
Whereupon, who is daft enough to want to get involved? The Sage of Omaha doesn't which is good enough for me.