Spirit Airlines Ch.11
#111
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#112
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My understanding is that most of the aircraft are leased. If so, they would simply go back to the lessor. Legacies would then likely compete to lease or purchase only those aircraft without engine issues, but that wouldn't trigger any type of benefit for the employees. They'd also compete for future delivery slots. Airport slots go back to the controlling entity and then reallocated as they see fit. The creditors get the goldmine, the employees get the shaft. This of course assumes CH 7 rather than CH 11.
#114
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#115
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It's hard for the creditors to accept less though without the actual BK court ordering it because they have investors and BOD's to answer to as well.
#116
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My understanding is that most of the aircraft are leased. If so, they would simply go back to the lessor. Legacies would then likely compete to lease or purchase only those aircraft without engine issues, but that wouldn't trigger any type of benefit for the employees. They'd also compete for future delivery slots. Airport slots go back to the controlling entity and then reallocated as they see fit. The creditors get the goldmine, the employees get the shaft. This of course assumes CH 7 rather than CH 11.
I'm not trying to hate on anyone's employer, I hope it works out. It's just the way the situation appears.
#117
I agree. There's an article stating the fleet was 67% leased aircraft, and that was before Spirit sold 25 airplanes to try to reduce its debt. I really don't think there is much meat on the bone to entice someone to come in and buy Spirit. They would be taking on massive debt without gaining any real assets. Even the delivery slots might not be worth much with almost everyone acknolwedging that there is now an overcapacity in domestic markets.
I'm not trying to hate on anyone's employer, I hope it works out. It's just the way the situation appears.
I'm not trying to hate on anyone's employer, I hope it works out. It's just the way the situation appears.
Another airline might hypothetically agree to take on significantly restructured debt, in exchange for having a plausible path to service the debt going forward.
Obviously the debt would *have* to be restructured for anybody to get anywhere near it with a ten foot pole. But restructured debt held by a (reliable) acquiring airline, a known quantitity, might be preferred by creditors to rolling the dice in BK court.
So hypothetically the creditors would work with SWA. They might not be interested in working with another ULCC if they don't like the business model, might be jumping out of the frying pan into the fire.
All very hypothetical, just examples.
#118
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I dont really understand the intracacies of bankruptcy, but I do know one thing; No legacy (or southwest) is going to do anything that would require a merger of the pilot group. Maybe if they could staple, but I dont think thats possible these days.
#119
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You're right, and when you think like management, why would you deal with any form of a merger? They'd potentially be interested in certain pieces such as delivery slots, but not the whole pie. If Spirit would get to CH 7, others would just pick the bones. Aircraft returning to the lessor would then be available for others to rent/purchase. Airbus could also reallocate delivery slots to the highest bidder, however none of this would trigger any type of fragmentation or merger clause. When it comes to the crews, they wouldn't be restricted to any seniority order or requirement to take everyone either. They would be free to hire only those that they wanted which would provide a ready pool of experienced pilots that they could sift through and not have to draw from their regional feed. Hopefully it never gets to that point though.
#120
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Managment of a legacy that has 17k+ pilot group doesnt really care about a 3k pilot group being merged into their 17k pilot group, that wont even be noticable. ALPA carriers can't staple if they merge anyway. The main goal of management would be to get planes and have them staffed and if a merger for the "right price" to prevent a bidding war for pieces might actually be beneficial. But, this is hypothetical... i dont believe it will happen. My guess is Chapt 11, reorganize, change business model for more premium offerings, maybe leave the ULCC entirely and come out the other end a different type of airline.
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