The lines at the Delta Airlines counters in Atlanta this week were as busy as ever. Passengers were buying tickets, upgrading seats and making reservations for future flights. The only thing missing was any sign that the airline headquartered there had just filed for bankruptcy within the past week.
The planes are still flying as usual for both Delta and Northwest which also filed for Chapter 11 bankruptcy protection late last week. Delta has lost $10 billion since 2001. Northwest Airlines, crippled in recent weeks by a mechanics' strike, has been hemorrhaging $4 million a day.
Both airlines say it will be business as usual for the nation's travelers. It's the airlines' investors and creditors who will be left in mid-air. Workers, too, as history shows most will be asked for more salary and benefit cuts to shore up the carriers.
Four of the nation's major airlines are protected under Chapter 11. Delta, Northwest, United and US Airways all sought the court's protection from creditors.
Normally, if a business can't pay its bills, lenders stay away. But not with airlines. The cash-generating companies have lenders lined up to help them. They often get preference at the top of the payback chain, ahead of folks who have been there for years.
Lenders provide "debtor in possession loans." The Chicago Tribune reports most of them emerge whole in airline bankruptcies. The liquidity is there as cash flow is not jeopardized if they keep flying. Vendors often get pennies on the dollar and employees might lose their pensions but the lenders usually come out ahead.
Editorials
Lenders line up to help airlines in bankruptcy
- Editorials
-
-
Say no to power expansion
A heated House committee meeting last week ended in a 6-5 vote to send a bill to the floor that gives the governor power to remove and replace appointees to state agencies, boards or commissions....
-
Focus should be on water policy legislation
Oklahoma legislative leaders are pushing ahead on water policy legislation, despite the water rights lawsuit filed by American Indian tribes. We applaud Speaker Kris Steele on pushing the water proposals filed by House members....
-
Trooper replacements needed for state’s OHP
Oklahoma’s Highway Patrol has 759 troopers, with 210 eligible to retire and another 26 becoming eligible this year. They certainly won’t all choose to retire at once, but the possibility worries patrol officials. Troop strength is the ...
-
A reprieve for state bases
The Pentagon has released its plans to downsize its forces and eliminate some weapons systems funding, ships and airplanes. But a published report says the state’s five military bases will likely be spared major cuts....
-
Show them some love
Oklahoma joins bus drivers and riders throughout the nation in the “Love the Bus” campaign to raise awareness and appreciation for the thousands of school bus drivers and aides who safely transport children to and from school each day....
-
Cuts in mental health short-sighted at best
When state budgets tightened up three legislative sessions ago, mental health and substance abuse treatment appropriations amounted to low-hanging fruit. It was easy for lawmakers to reduce treatment for mental health consumers and ...
-
‘Flavor of the month’
State Republicans have invited all of the GOP presidential candidates to Oklahoma. Former candidate Herman Cain came to Oklahoma City in early December, just days after he suspended his campaign. Rick Santorum brought his charged-up ...
-
Gov. Fallin says tax cuts bring national attention
Rating agencies are often courted by state, county and local officials seeking better ratings and thus lower interest costs on long-term debt financed through bonds. Oklahoma’s governor and other officials called on various agencies this ...
-
AA’s decision a blow to Tulsa
The announcement by American Airlines that it will likely lay off almost a third of its Tulsa work force is terrible news. Looking for the bright side, the huge Tulsa maintenance facility will keep almost 70 percent of its employees ...
-
Oklahoma kids rank low
Oklahoma kids continue to rank low in terms of poverty, health, child welfare, early childhood development and hunger....
- More Editorials Headlines
-
Say no to power expansion
