Monday, December 09, 2002
Writing a New Chapter in United's History-Chapter 11-UAL finanally filed for Chapter 11 bankrupcy protection this morning. The airline will keep flying, so ticket-holders are safe for now. This will give them time to trim costs and work out deals with creditors; a billion dollars of debt was due later in the week, so this filing gives them that time. I don't think loan gaurentees and subsidies are the answer here. The airline industry needs to trim costs as hightened security procedures and various telecommunications items and e-mail make travel less attractive. Should the government take the hit for the whole thing or should stockholders and creditors take it? Methinks the latter. Air travel will continue, possibly with a few layoffs and cancelled routes, without the government help.
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