Originally Posted by
TransWorld
Compared to $50 billion in total debt, $500 million and $750 million probably qualify as “no major debt” needing to be repaid before 2023. That is only 2 - 3% of the overall debt.
After that, management is counting on strong profits to yield enough cash flow to meet big time debt repayment. It is a roll of the dice, but I think the odds of success are a lot better than Vegas gives you.
Since the EXPECTATION in Vegas is that you LOSE 5% every time you play, your statement is true enough, but hardly encouraging. I think AA is playing the hand they have been dealt as well as possible, but it wasn’t a strong hand. They have arguably been the LEAST profitable of the legacies before COVID and have now cut their passenger seats by 80%, have far more debt, and a lower credit rating. They are going to need to make it drawing to an inside straight. Not saying it’s never been done, but they are going to need luck - most likely in the form of the PROMPT return of business and international flying. Whether they’ll get it or not remains to be seen. They aren’t going to win in a CASM fight with SWA, far less the ULCCs.