September 14, 2005

Delta and Northwest. Bankrupt.

From LA Times: "The nation's airline crisis took a stunning turn for the worse today when Delta Air Lines Inc. and Northwest Airlines Corp. both filed for bankruptcy in the face of massive losses, meaning that four of the seven largest U.S. carriers are now flying in Chapter 11 bankruptcy."

Here's the whole article. You have to wonder just how much of the problems of these airlines are caused by all the CFOs and MBAs hired to paint a rosy picture of earnings along with converting losses into profits through creative accounting.

You know the type. The suited guy with absolutely no life experience, fresh off the MBA assembly line of Harvard, hired to replace the old-gen economist in the vain hope of increased efficiency. Sure, it is all good, as long as the economy is coasting along. As soon as it hits a rough patch, it becomes necessary to lie, so that you may cover that ass. And one lie leads to another, and another, and then the company is bankrupt.

Luckily for you, you got the oil prices to blame your failure. Unfortunately there is the old-gen economist that is still thinking that the company should have foreseen this crisis and changed the business model to be able to withstand a blow in fuel cost. Especially knowing that we are dealing with a limited supply commodity that is unfortunately abundant in the world's most unstable and insane areas.