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Author Topic: Bankruptcy Reorg Last Chance  (Read 894 times)

Online schro

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Bankruptcy Reorg Last Chance
« on: August 22, 2013, 07:31:38 PM »
I am a proprietor of a massively failing airline over in JA8 right now and doing a few experiments with the death spiral to see how possible it is to right the ship once the toilet starts swirling, and what I've come up with has been the obvious - it is near impossible to shrink an airline to profitability for a chance at recovery even if there's a distinct chance that one can recover, thus, I propose the following ONE TIME option for reorganization (akin to Chapter 13 bankruptcy). This would be available to airlines who no longer have the cash available to pay for heavy checks (negative cash), CI is declining and are otherwise identified as being doomed by the system.

Upon selecting the reorganization option, it would make it possible for the airline to shrink to profitability (if in fact, it is possible). It would require/allow the following things to happen -
1. All bases other than HQ will be closed.
2. All leased planes that are not currently scheduled on routes will be returned to the lessor with no penalty (player would need to unscheduled HQ planes that are no longer wanted prior to pressing the button)
3. Staff will be sacked to the 100% level
4. CI will get dropped to -100
5. (maybe) A provisional allowance to operate in the red and have maintenance performed and all recurring bills paid (maint/marketing) for 3-6 game months  to allow the airline to see if operations are possible at the shrunken size.

If a program like this was available, my JA8 airline could have been saved - I did everything on the list above except plane returns but now my revenue is lower than my lease bill, so there's no hope at this point. If I could have done a controlled shrink, then I would have positive cash today.

Offline CUR$E - God of AirwaySim

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Re: Bankruptcy Reorg Last Chance
« Reply #1 on: March 20, 2014, 03:11:18 PM »
I like this idea. A CI drop to -100 seems a bit drastic and is, honestly, not what my feeling was and is when real Chapter 13 BKs occured. A CI reset to 0 should give the competitors enough space and earning for their work and also allow the airline to recover somehow.

An alternative to this is keep CI-100 but allow for a quick recover.

Offline LemonButt

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Re: Bankruptcy Reorg Last Chance
« Reply #2 on: March 20, 2014, 03:37:15 PM »
Or we could just have a leaseback program which I believe sami said was in the works.  If you have assets, you can sell them to the leasing company and lease them back.  This would provide significant lump sums to right the ship and pay to cancel leases, etc.  IRL I don't think any airline would flat out liquidate when they have assets they can use to free up capital via a leaseback.

Offline JJP

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Re: Bankruptcy Reorg Last Chance
« Reply #3 on: March 23, 2014, 01:21:27 AM »
Very nice suggestion, Schro.  I like Curse's idea of reset CI to 0 as providing enough space to competitors.  Interesting!

Offline LotusAirways

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Re: Bankruptcy Reorg Last Chance
« Reply #4 on: March 23, 2014, 03:59:11 PM »
Lease back option. Schro's airline was asset rich but cash poor. Problem would have been solved with lease back.

LA

Online schro

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Re: Bankruptcy Reorg Last Chance
« Reply #5 on: March 23, 2014, 09:07:59 PM »
Lease back option. Schro's airline was asset rich but cash poor. Problem would have been solved with lease back.

LA

No, it wasn't. I had no assets that I could do anything with. Keep in mind that this airline was bankrupt before your registration date ;-).

Interesting how this ages old request for necro'ed.

Offline LotusAirways

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Re: Bankruptcy Reorg Last Chance
« Reply #6 on: March 25, 2014, 11:53:36 AM »
Yep, I am confusing Elite members and games.

Was actually thinking about Pan American Luxury Transport from esquireflyer on the current WG2, assuming it was over. But seems esquire was able to turn it around (net profits in the last 3 quarters), despite having the oldest fleet in the game up until very recently.

LA

Online Sami

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Re: Bankruptcy Reorg Last Chance
« Reply #7 on: May 28, 2014, 12:30:06 AM »
Bump for comments on this matter, ie. 'chapter 11' equivalent set of rules.

Offline LemonButt

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Re: Bankruptcy Reorg Last Chance
« Reply #8 on: May 28, 2014, 01:07:48 PM »
Bump for comments on this matter, ie. 'chapter 11' equivalent set of rules.

Leaseback option.  Sell all your assets to a broker and leaseback for monthly lease rate.  This will give the airline a big cash influx while maintaining operations.  If they can't right the ship with the extra cash they received, then they go to liquidation.  Since the banking system won't let you take out loans against 100% of your assets, this makes sense.

For those who don't know, Chapter 11 is the US Bankruptcy code and calls for reorganization of debt versus liquidation of the company's assets.  This means if your expenses are $1000 and your income is only $900, you can file for Chapter 11 and the judge will force creditors to restructure debt to get you back under $900 in expenses.

Offline JumboShrimp

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Re: Bankruptcy Reorg Last Chance
« Reply #9 on: May 28, 2014, 01:25:06 PM »
Quote
Leaseback option.  Sell all your assets to a broker and leaseback for monthly lease rate.

As a one time, last reorg, would be fine, but I don't think this should be a routine thing.  I think players, as part of normal play, should depend on the UM pricing / timing to sell / acquire aircraft.  Either AI brokers of other players....

 

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