chrisreedrules

I personally think that while an outright liquidation is within the realm of possibility, what is far more likely is a restructuring. The creditors and the lessors don’t want those airplanes back. Who else would have the same chance of anything resembling profitability flying those airplanes if not American? And which other carriers anywhere on the globe are going to be looking for that many aircraft right now? The answer is likely no one. So they’ll likely restructure their debt into something manageable and something realistic to pay back over the next 10-15 years.

A liquidation of the assets would mean that large swathes of the American population would have a dearth or air service. And that would really only further impede any economic recovery. That being said, selling the WOs to a holding company would allow American to immediately clear its books of operating expenses and debt which would help with securing credit and restructuring. So in my mind this is a very plausible outcome. It doesn’t mean that any flow agreements go away. And it doesn’t necessarily mean our contract gets gutted. And it would probably be considered a relatively short-sighted move by American. But the need to stem cash burn and secure further credit will eliminate any long-term strategic planning. Survival will be, as it is right now the name of the game.