Manufacturing Industry
British Airways claims US bankruptcy system is another form of state aid - report
Airline Industry Information, Nov 9, 2004
AIRLINE INDUSTRY INFORMATION-(C)1997-2004 M2 COMMUNICATIONS LTD
British Airways' chairman Martin Broughton has told the Financial Times that the US bankruptcy system is being used by struggling US carriers as a form of back-door state aid.
Broughton said that bankrupt carriers such as United Airlines and ATA Airlines were being propped up by the US Chapter 11 protection which means creditors cannot touch them and that they were walking away from many of their obligations because they can.
Rod Eddington, British Airways' CEO, also attacked the US bankruptcy system, citing United Airlines as an example of how the system can keep a bankrupt airline afloat while it walks away from its pension commitments. Eddington added that British Airways had increased its own pension payments by GBP134m in 2004, reports AFX.
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