Originally Posted by
readywhenyouare
Delta is rapidly losing money with no end in sight. A few will give the "but their cash reserves..." excuse but there is no way Delta would burn through all of their cash before filing for bankruptcy protection. So what would a hypothetical bankruptcy look like as far as employees, hubs, aircraft, and frequent flyer program look like?
This seems to be a common thread - that bankruptcies are somehow "good" and that they will be done early and often. That is an incorrect assumption, if only because the owners (equity holders) would never allow it. Existing equity owners are essentially the least senior debt holders. This means that they are either completely wiped out, or if they retain a stake, are heavily diluted (often on the order of 80-90%+).
When viewed from this lens, there is no incentive to declare bankruptcy while there is still a chance of recovery - or even if there isn't. The end outcome for the owners is the same.