Debt can be reduced or extended
Creditors may accept lower recoveries, longer maturities or new equity in exchange for keeping the airline alive.
Aircraft leases are a major negotiation point
A carrier can seek lower rents, return unwanted aircraft or reject burdensome contracts, reshaping the fleet around a smaller or more profitable network.
Capacity usually follows demand
Loss-making routes, excess frequencies and marginal bases may be cut so aircraft and crews are concentrated where revenue is stronger.
New capital is often necessary
A restructured airline may need fresh investment to fund operations, deposits, maintenance and working capital while the turnaround proceeds.
Labor agreements can also change
Wages, staffing, work rules and pension obligations may be renegotiated, which can make restructuring socially and politically difficult.
Survival depends on fixing the underlying economics
Financial engineering can buy time, but a carrier still needs a network, product and cost base capable of producing sustainable cash flow after court protection ends.
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