Originally Posted by
AllYourBaseAreB
Easily lose 1000 numbers waiting. Email HR and say you have a Delta offer and want to interview stat for AA. If no joy, go to delta. I work at AA.
The culture here is changing rapidly since we’re retiring so many and post merger guys can upgrade everywhere except Phoenix.
Screw it. Just go to Delta. From AAs first quarter earnings report:
American posted a net loss of $1.6 billion in the first quarter on revenue of nearly $8.9 billion
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That’s another $1.6 billion to add to AAs already $40+ Billion dollar debt load. Right now AA short and long term credit is rated B- in the bond market. Typical junk bond credit - even backed up by assets, commands a premium of over 8% in the market today. What that means is that AA is going to have to generate positive cash flow to pay off that additional debt, but until they do their interest expense for debt service is going to be another $128 million (that is, 8% of $1.6 Billion) ANNUALLY than it would have otherwise been, and it was already approaching $2 billion last year. Basically, that’s going to be $2 Billion annually going out just to service INTEREST EXPENSE on the debt, before you put a dime into actually paying it off. And as time goes by, as you are unable to pay that debt off, you wind up refinancing it AT CURRENT RATES, which are a lot higher than those in effect when the original bonds were sold. AA is right now paying $2 Billion annual interest on about $43 Billion, an average rate of only about 4.5%. Refinancing that at 8% or more (the fed is raising interest rates) is going to be even more painful.
Jump to Delta.