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Essay / Research Paper Abstract
This 3-page paper focuses on the effect of airline bankrupties on airports. As airports are, in effect, the "landlords" of air carriers, a Chapter 11 filing can have some problems on airports. Bibliography lists 1 source.
Page Count:
3 pages (~225 words per page)
File: D0_MTairair.rtf
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Unformatted sample text from the term paper:
not been mentioned so much is the impact of such bankruptcies on airports. About two years ago, when the Federal Aviation Administration
(FAA) sent out a survey dealing with the effect of airline bankruptcies on airports, a huge fight and "blame game" between airlines and airports took place (Bond, 2003). On the
one hand, airports noted that bankruptcy protection has meant the airlines can draw out both negotiations for gate space and decisions on whether to continue leasing at airports -- as
well as the fact that airlines are able to obtain financial concessions (while creating under use) (Bond, 2003). When a carrier declares Chapter 11, it provides 60 days for the
airlines to continue to occupy and to pay for leased property while the carrier has this period to decide to "retain, reject or renegotiate the lease" (Bond, 2003, 34). This
is all well and good -- except when bankruptcy courts extend this period while an airline tries to restructure its finances. For example, United Airlines, which declared Chapter 11 during
December 2002, was able to extend this decision-making capability to force Denver International Airport to grant better terms for its gates and terminal improvement, that directly cut into DIAs attempts
to expand for rival Frontier Airlines (Bond, 2003). The problem here, is that while an airline is trying to decide whether to
assume or reject the airports lease, the airport cant do much of anything until the carrier in Chapter 11 says "yes" or "no" (Bond, 2003). This means the airport cant
take the gates or the facilities and find another more competitive, more reliable client to fill the space (Bond, 2003). There are
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