maybe these companies should be liquadated and the proceeds be distributed to their employees as pension.
Isn't that what happens in a bankrupsy? I can't pretend to be an expert, but I know that creditors get paid before stockholders, and it seems that the pension funds would count as a debt that needed to be paid before the stockholders got any money out of the company.
Isn't that what happens in a bankrupsy? I can't pretend to be an expert, but I know that creditors get paid before stockholders, and it seems that the pension funds would count as a debt that needed to be paid before the stockholders got any money out of the company.
I hope that is what would happen, but I suspect that the creditors have a bigger claim.
I hope that is what would happen, but I suspect that the creditors have a bigger claim.
As they should do - if you are owed money by an airline, they should pay you. A lot of the creditors will be small business like food preparation services that are stiffed out of 60 days revenue if they don't get paid back.
You don't want the airline going under to cause a ripple of smaller bankrupsies that affect even more people.
But if there is no money left over after liquidation and paying off debts, then the airline was on the way down, and the sooner you liquidate those assets, the better off everyone would be.
In liquidation bankruptcy, the pensions get dumped on the PBGC early on. Airlines are so heavily leveraged, that creditors will get pennies on the dollar and shareholders get nothing. (Look at United's reorg plan if you don't believe it... current shareholders are getting NOTHING for thier shares... not even shares of the "new" stock.)
When the pensions get dumped on the PBGC, the retirees get about 40% of what they were promised. This is money that they have been promised for their entire career... they have already done the work, but now, the company doesn't want to pay them the agreed-upon price for the work they've already done.
I was EXTREMELY happy when my airline froze it's defined benefit pension plan and moved to a defined contribution plan... at least they can't take that away from me 20 years down the road!
I was EXTREMELY happy when my airline froze it's defined benefit pension plan and moved to a defined contribution plan... at least they can't take that away from me 20 years down the road!
That is one of the many reasons that I was glad to get laid off Nortel - I can move my 401K to an IRA now, and my pension to an IRA next spring. I don't trust the company with my retirement money, and the earlier I get it out the better.
As an aside: didn't Amtrak just do something like triple its fares on the big commuter lines?
They increased the price of tickets by 3 dollars. Northeast Corridor ticket prices by 4 dollars.
Amtrak could/does have a valuable role to play in our transportation system. By building corridors throughout the US, Amtrak could become a major player in transporation. Look at the Northeast Corridor and the Pacific Northwest's Cascades service. The Cascades service doesn't even make it over 79mph and yet they increased their ridership over 300% over last 5 or 7 years.
Chicago is the next rail hub to come to bloom. Chicago - St. Lois, Twin Cities, Detroit, Omaha....all within comporable time as flying.
I'm not talking about the small carriers like jet blue.
Regarding raising the prices, what other option is there for them? As a taxpayer, I am sickened by the idea of bailing them out just so that they can continue their money losing ways. If that means the taxpayers have to guarantee pensions for many of their employees, so be it. It amounts to the same thing as a bailout except that we can let the badly managed airlines die and make room for newer providers that have a profitable structure.
jetBlue is hardly a small carrier anymore. And they are a great example of how to run an airline or any business for that matter. They even have several international flights now.
What other option is there? Better management. These airlines are run by old fools who are too stuck in their ways to realize the times have changed and they need to follow to stay afloat.
They increased the price of tickets by 3 dollars. Northeast Corridor ticket prices by 4 dollars.
Amtrak could/does have a valuable role to play in our transportation system. By building corridors throughout the US, Amtrak could become a major player in transporation. Look at the Northeast Corridor and the Pacific Northwest's Cascades service. The Cascades service doesn't even make it over 79mph and yet they increased their ridership over 300% over last 5 or 7 years.
Chicago is the next rail hub to come to bloom. Chicago - St. Lois, Twin Cities, Detroit, Omaha....all within comporable time as flying.
My town is about to get light rail service along the entire Wasatch Front, and we're all tremendously excited about it. Traffic on I-15 around SLC is a nightmare.
jetBlue is hardly a small carrier anymore. And they are a great example of how to run an airline or any business for that matter. They even have several international flights now.
What other option is there? Better management. These airlines are run by old fools who are too stuck in their ways to realize the times have changed and they need to follow to stay afloat.
JetBlue is still a small carrier (comparing to such airlines as Continental or American).
JetBlue doesn't have an international route system. Santiago, DR and Nassau, Bahamas hardly count as an international system They serve a total of 33 cities ... and not all of them are daily service. They use small airplanes with limited range.
Now... lets compare that to the #5 carrier in the US.... Continental Airlines serves 5 of the 7 continents on this planet. And more international destinations than any other US carrier. And at least 4 times as many domestic destinations. Airplanes capable of flying to any point on the globe (nonstop). ... and there are 4 other carriers that are considered larger than that!
As for management being "old fools" .... most major airline mangement these days are in their 40's or 50's ... hardly "old" for that position, and if they were fools, they wouldn't be there. They are constantly trying to revise their way of doing business to account for jet-fuel prices that are TRIPLE what they had planned on ... I have seen the price we pay for jet-fuel rise from 80 cents a gallon to well over $2 in the last two years. Noone expected that to happen, much less for it to remain that high.
Airlines NOT in bankruptcy are having to compete with United and USAirways which have an unfair advantage (being in bankruptcy) which has lasted for 3 years now.... If a coompany can't come up with a plan to get out of bankruptcy in 3 years, they need to just liquidate!! Perhaps the statement about management being fools would be accurate for United and USAirways.
Jetblue will be interesting to watch in the near future.... they are going to lose several advantages. Their fuel hedging will run out and they will have to pay market prices. They also got some pretty good lease deals for their start-up ... deals that are going to make their costs INCREASE shortly. I'm not saying that was bad... in fact it was maybe a pretty shrewd deal for the company as a start-up... I'm just not sure if they are ready to compete when the playing field gets leveled... we shall see.
oh well... the comments by Bronxite were just a bit uneducated.
Airlines NOT in bankruptcy are having to compete with United and USAirways which have an unfair advantage (being in bankruptcy) which has lasted for 3 years now.... If a coompany can't come up with a plan to get out of bankruptcy in 3 years, they need to just liquidate!!
What is the advantage of being in bankruptsy? It seems like it would be a big disadvantage - your employees would be nervious, and you couldn't borrow any money from anyone.
One of the only profiting airlines in the USA is Southwest Airlines. They use exclusively Boeing 737s to keep maintenance costs down, and have a much more modern flight model that's NOt hub and spoke. At the end of the day, they are also one of the cheapest, often by quite a big factor.
The problem is that the airlines are dinosausrs, and they have come to expect federal government to bail them out of trouble. It's the American version of EU airline/airbus subsidizing.
Quote:
Originally posted by Anders
Hmm. What is the fastest train between LA and San Francisco & New York and Washington?
The Washington to New York route is very profitable. The slow trains do it in about 4 hours. The Metroliners, closer to three, and the Accela, closer to 2. The bonus is that Union Station and Penn Station are very accessible and centrally located, unlike the airports (save Washington National). In the end, the door-to-door transit time from DC to New York on the slow train is about 6hrs, which is similar to what it is by plane.
N.B. I used to frequent that route a fair bit, but it has been a few years and I'm not even sure if the Accela plans have panned out.
The Accela trains were sidelined for several months because of brake problems. They have been coming back and I am not sure if they are all back yet. The DC NYC route was faster than plane because of the wait time at the airports. Leaving NYC by train is so much better than having to get outside of the city to catch a plane. Since my wife doesn't like to fly anymore we have gone by train on several long trips. The view on the east coast is not as grand as it is in the mountain west or Canada. So if you are just trying to get somewhere fast and it is greater than 400 miles take a plane but be choosy and that more than anything else will determine which airlines will survive.
I think high speed rail would be great but without a major government jobs works it will never happen. NYT had a great article on what plagues the Accela. In a nut shell, because the Accela runs on the same rails as freight, the DOT required it to be over built to survive a crash with a freight train. That tossed the entire design off. Can't go too fast, can't tilt too much and now its breaks are cracking because the thing is so effing heavy. RATHER had they made a line just for the Accela they could have had a system like Europe and Japan. The cost is so high to make a dedicated line that no private effort can fund this much needed work. So why shouldn't the government pay for it? They pay for roads and airports. Plus it will be more good union job at a time when unions are being snuffed out. Simulate the economy in a way that actually works. Let the government build the track and rent it out to private companies to run trains on it. Charge enough to make back the money in 50 years.
Comments
Originally posted by trick fall
So should we let the airlines and automakers declare bankruptcy and stiff their retirees?
maybe these companies should be liquadated and the proceeds be distributed to their employees as pension.
Originally posted by Kishan
maybe these companies should be liquadated and the proceeds be distributed to their employees as pension.
Isn't that what happens in a bankrupsy? I can't pretend to be an expert, but I know that creditors get paid before stockholders, and it seems that the pension funds would count as a debt that needed to be paid before the stockholders got any money out of the company.
Originally posted by e1618978
Isn't that what happens in a bankrupsy? I can't pretend to be an expert, but I know that creditors get paid before stockholders, and it seems that the pension funds would count as a debt that needed to be paid before the stockholders got any money out of the company.
I hope that is what would happen, but I suspect that the creditors have a bigger claim.
Originally posted by Kishan
I hope that is what would happen, but I suspect that the creditors have a bigger claim.
As they should do - if you are owed money by an airline, they should pay you. A lot of the creditors will be small business like food preparation services that are stiffed out of 60 days revenue if they don't get paid back.
You don't want the airline going under to cause a ripple of smaller bankrupsies that affect even more people.
But if there is no money left over after liquidation and paying off debts, then the airline was on the way down, and the sooner you liquidate those assets, the better off everyone would be.
When the pensions get dumped on the PBGC, the retirees get about 40% of what they were promised. This is money that they have been promised for their entire career... they have already done the work, but now, the company doesn't want to pay them the agreed-upon price for the work they've already done.
I was EXTREMELY happy when my airline froze it's defined benefit pension plan and moved to a defined contribution plan... at least they can't take that away from me 20 years down the road!
Originally posted by KingOfSomewhereHot
I was EXTREMELY happy when my airline froze it's defined benefit pension plan and moved to a defined contribution plan... at least they can't take that away from me 20 years down the road!
That is one of the many reasons that I was glad to get laid off Nortel - I can move my 401K to an IRA now, and my pension to an IRA next spring. I don't trust the company with my retirement money, and the earlier I get it out the better.
It doesn't really matter what we "let" them do. It is what is going to happen.
Both the airlines and at least one car company have been bailed out before.
Originally posted by midwinter
Trains? In America?! HAHAHAHAHAHA!
As an aside: didn't Amtrak just do something like triple its fares on the big commuter lines?
They increased the price of tickets by 3 dollars. Northeast Corridor ticket prices by 4 dollars.
Amtrak could/does have a valuable role to play in our transportation system. By building corridors throughout the US, Amtrak could become a major player in transporation. Look at the Northeast Corridor and the Pacific Northwest's Cascades service. The Cascades service doesn't even make it over 79mph and yet they increased their ridership over 300% over last 5 or 7 years.
Chicago is the next rail hub to come to bloom. Chicago - St. Lois, Twin Cities, Detroit, Omaha....all within comporable time as flying.
Originally posted by Kishan
I'm not talking about the small carriers like jet blue.
Regarding raising the prices, what other option is there for them? As a taxpayer, I am sickened by the idea of bailing them out just so that they can continue their money losing ways. If that means the taxpayers have to guarantee pensions for many of their employees, so be it. It amounts to the same thing as a bailout except that we can let the badly managed airlines die and make room for newer providers that have a profitable structure.
jetBlue is hardly a small carrier anymore. And they are a great example of how to run an airline or any business for that matter. They even have several international flights now.
What other option is there? Better management. These airlines are run by old fools who are too stuck in their ways to realize the times have changed and they need to follow to stay afloat.
Originally posted by PowerPC
They increased the price of tickets by 3 dollars. Northeast Corridor ticket prices by 4 dollars.
Amtrak could/does have a valuable role to play in our transportation system. By building corridors throughout the US, Amtrak could become a major player in transporation. Look at the Northeast Corridor and the Pacific Northwest's Cascades service. The Cascades service doesn't even make it over 79mph and yet they increased their ridership over 300% over last 5 or 7 years.
Chicago is the next rail hub to come to bloom. Chicago - St. Lois, Twin Cities, Detroit, Omaha....all within comporable time as flying.
My town is about to get light rail service along the entire Wasatch Front, and we're all tremendously excited about it. Traffic on I-15 around SLC is a nightmare.
Make them part of public transit.
Originally posted by Bronxite
jetBlue is hardly a small carrier anymore. And they are a great example of how to run an airline or any business for that matter. They even have several international flights now.
What other option is there? Better management. These airlines are run by old fools who are too stuck in their ways to realize the times have changed and they need to follow to stay afloat.
LOL .... do some research.
Originally posted by KingOfSomewhereHot
LOL .... do some research.
Care to share?
JetBlue doesn't have an international route system. Santiago, DR and Nassau, Bahamas hardly count as an international system
Now... lets compare that to the #5 carrier in the US.... Continental Airlines serves 5 of the 7 continents on this planet. And more international destinations than any other US carrier. And at least 4 times as many domestic destinations. Airplanes capable of flying to any point on the globe (nonstop). ... and there are 4 other carriers that are considered larger than that!
As for management being "old fools" .... most major airline mangement these days are in their 40's or 50's ... hardly "old" for that position, and if they were fools, they wouldn't be there. They are constantly trying to revise their way of doing business to account for jet-fuel prices that are TRIPLE what they had planned on ... I have seen the price we pay for jet-fuel rise from 80 cents a gallon to well over $2 in the last two years. Noone expected that to happen, much less for it to remain that high.
Airlines NOT in bankruptcy are having to compete with United and USAirways which have an unfair advantage (being in bankruptcy) which has lasted for 3 years now.... If a coompany can't come up with a plan to get out of bankruptcy in 3 years, they need to just liquidate!! Perhaps the statement about management being fools would be accurate for United and USAirways.
Jetblue will be interesting to watch in the near future.... they are going to lose several advantages. Their fuel hedging will run out and they will have to pay market prices. They also got some pretty good lease deals for their start-up ... deals that are going to make their costs INCREASE shortly. I'm not saying that was bad... in fact it was maybe a pretty shrewd deal for the company as a start-up... I'm just not sure if they are ready to compete when the playing field gets leveled... we shall see.
oh well... the comments by Bronxite were just a bit uneducated.
Originally posted by KingOfSomewhereHot
Airlines NOT in bankruptcy are having to compete with United and USAirways which have an unfair advantage (being in bankruptcy) which has lasted for 3 years now.... If a coompany can't come up with a plan to get out of bankruptcy in 3 years, they need to just liquidate!!
What is the advantage of being in bankruptsy? It seems like it would be a big disadvantage - your employees would be nervious, and you couldn't borrow any money from anyone.
Probably cash up front for all purchaces too...
Originally posted by Anders
. . .Someone explain this to me.
One of the only profiting airlines in the USA is Southwest Airlines. They use exclusively Boeing 737s to keep maintenance costs down, and have a much more modern flight model that's NOt hub and spoke. At the end of the day, they are also one of the cheapest, often by quite a big factor.
The problem is that the airlines are dinosausrs, and they have come to expect federal government to bail them out of trouble. It's the American version of EU airline/airbus subsidizing.
Originally posted by Anders
Hmm. What is the fastest train between LA and San Francisco & New York and Washington?
The Washington to New York route is very profitable. The slow trains do it in about 4 hours. The Metroliners, closer to three, and the Accela, closer to 2. The bonus is that Union Station and Penn Station are very accessible and centrally located, unlike the airports (save Washington National). In the end, the door-to-door transit time from DC to New York on the slow train is about 6hrs, which is similar to what it is by plane.
N.B. I used to frequent that route a fair bit, but it has been a few years and I'm not even sure if the Accela plans have panned out.
reg
Quit subsidizing a poor business model with taxpayer money...let the market decide!
Originally posted by fng
The cost is so high to make a dedicated line that no private effort can fund this much needed work.
Most of the rail in America was put in place by private firms. The problem has more to do with land ownership.