« Delta Air Lines says pay cuts or bankruptcy »; in other words, pilots should screw themselves out of a third of their paychecks or we’ll take our marbles and go home:
‘Delta Air Lines said Monday that it may have to file for bankruptcy if its pilots union doesn’t agree to significant wage cuts, the first time the struggling carrier has publicly linked the two issues in a regulatory filing. The nation’s third-largest airline has been cautious about discussing the possibility of bankruptcy. But Delta said Monday in a quarterly report with the Securities and Exchange Commission that it might pursue Chapter 11 unless it achieves a “competitive cost structure” for pilot wages. A spokesman for Delta acknowledged that it’s the first time such language has been used in a public filing. “It’s an option,” the spokesman, Anthony Black, said of bankruptcy. “It’s not anything we see in the foreseeable future, but it’s out there.”’
—SFGate.com
An Atlanta Journal-Constitution article reports the airline had over $2 billion in liquid cash at the end of the first quarter, but it’s bond rating is ‘deep in the junk range,’ it’s borrowed to the hilt and facing a billion in debt payments in the next year, and so on.
But the real meat of the matter is, as The Chronicle noted, USAirways and United used Chapter 11 to secure deep pay cuts from employees, and American used the threat of Chapter 11 to the same effect.
And that’s what it’s really about … while the executives badly mismanage their airlines, they take home millions and millions of dollars in cash and bonuses and stock. That mismanagement and greed puts the airline into an unwinnable financial situation and the same executives then blame it on the workers salaries and threaten to send the company into Chapter 11 or ground the planes forever if the workers don’t pony up. It’s not that difficult to figure it all out.
I noticed that no one in any of these Chapter 11 articles questioned these executives about the financially stupid venture that is Delta’s ‘low-fare airline within an airline,’ ‘Song,’ or United’s equally stupid ‘Ted,’ or compared their management with that of perenially profitable Southwest. And when the comparison is made, they focus exclusively on worker salaries. Typical crappy and clueless journalism.
