More than just joining One World?
02-26-2020 | 09:51 PM
#31
On Reserve
Joined: Dec 2019
Posts: 11
Likes: 0
Amazing to see how many know it all Wall Streeters there are on here that AREN'T multi millionaires and are just spewing opinion while still swingin' gear in an airplane. Only one that knows his ****e is rballen since he used to work on Wall Street.
02-27-2020 | 05:32 AM
#32
You scratched my anchor
Joined: Feb 2011
Posts: 5,122
Likes: 74
if i'm not mistaken, a merger is different from a purchase. A purchase could look like this, if it were done with crayons on a napkin:
ALK market cap is worth $8B. AMR buys half of it for a controlling interest with $4B in debt from a bank. Lay off redundant workers from both companies and sell off redundant or unprofitable routes / hardware / infrastructure / IT. Say that's worth $500M. ALK has $1.5 billion in cash. Pocket it. Cash basis on the loan is now $2.0B.
Next, keep the pilots, airplanes, FAs, and base personnel in the new bases, and only the other profitable aspects of the business. Renegotiate labor on both sides to reduce costs. Now AMR doesn't have to train 3000 new pilots and maintainers, also doesn't need to fight for gates / routes to expand. More money there, but for now keep the basis at $2.0B.
ALK makes $790M per year. Pay off the $2B loan in less than 3 years. Then you have an airline with 18,000 trained pilots, 1278 mainline aircraft, and SFO, SEA, PDX, ANC as bases added to AMR's list.
After ALK is paid off, use the yearly profit from that purchase and from productivity gaines to continue paying off AMR's debt. Crush Delta in SEA, crush United in SFO, former ALK pilots get to fly widebodies from both.
I'm sure an actual businessman would give me an F, I'm happy to learn where I am incorrect.
ALK market cap is worth $8B. AMR buys half of it for a controlling interest with $4B in debt from a bank. Lay off redundant workers from both companies and sell off redundant or unprofitable routes / hardware / infrastructure / IT. Say that's worth $500M. ALK has $1.5 billion in cash. Pocket it. Cash basis on the loan is now $2.0B.
Next, keep the pilots, airplanes, FAs, and base personnel in the new bases, and only the other profitable aspects of the business. Renegotiate labor on both sides to reduce costs. Now AMR doesn't have to train 3000 new pilots and maintainers, also doesn't need to fight for gates / routes to expand. More money there, but for now keep the basis at $2.0B.
ALK makes $790M per year. Pay off the $2B loan in less than 3 years. Then you have an airline with 18,000 trained pilots, 1278 mainline aircraft, and SFO, SEA, PDX, ANC as bases added to AMR's list.
After ALK is paid off, use the yearly profit from that purchase and from productivity gaines to continue paying off AMR's debt. Crush Delta in SEA, crush United in SFO, former ALK pilots get to fly widebodies from both.
I'm sure an actual businessman would give me an F, I'm happy to learn where I am incorrect.
as an AA guy I’ll tell you how this would go.
you have the first part right:
”ALK market cap is worth $8B. AMR buys half of it for a controlling interest with $4B in debt from a bank.”
the rest would look like this:
Last edited by Al Czervik; 04-28-2020 at 04:14 AM.
02-27-2020 | 08:46 AM
#33
Line Holder
Joined: Nov 2006
Posts: 927
Likes: 2
From: This side of the dirt.
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