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0 pointsthrowaway20372y ago0 comments

Small note: JetBlue was started in 1999/2000, so it would be included on the "exception" list. But overall, your point stands. Chapter 11 re-org is bizarrely common in US airlines. Warren Buffett has many funny quotes about the terrible return on investment for US airlines -- both debt and equity.

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4 comments · 3 top-level

basch2y ago· 1 in thread

>Delta entered Chapter 11 on Sept. 14, 2005, amid high fuel prices and the burdens of high labor and pension expenses. Delta significantly reduced its labor and pension costs while under court protection.

It’s always interesting that Chapter 11 is a way out of pension promises. That someone can take employment at a certain wage, and then the company can renege on the back half of the compensation once the person retires.

lotsofpulp2y ago

Hence one should be wary of accepting the promise to be paid decades in the future by anyone other than the US federal government, or much more regulated entities like insurance companies. If the payer is not US federal government, stick to broad market index funds in 401k/IRA.

philwelch2y ago

> Chapter 11 re-org is bizarrely common in US airlines.

Philip Greenspun has a good writeup about why that is: https://philip.greenspun.com/flying/unions-and-airlines

bobthepanda2y ago

I suppose it depends on how you define “major.” One impetus of the proposed tieup was to launch JetBlue into the big leagues.

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