American finds cash cushion
05-25-2020, 03:59 AM
#41
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Originally Posted by Downtime
Right but if we haven’t returned to an environment of positive cash flow by the time out debt needs to be serviced AA is toast as well as DAL and UAL.
05-25-2020, 04:08 AM
#42
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Originally Posted by JulesWinfield
Sure, but they're just taking on more and more debt to survive. That bill becomes due at some point, apparently, 2022. When they need to start servicing the debt, even if they get back to 2019 revenue numbers, they will have a hard time staying afloat. AA was increasing their debt year over year the last few times, when the times were good. It wasn't all for new aircraft. I don't think they're going to file BK anytime soon, but the long term debt they've acquired may sink them in a couple of years.
There will be no buybacks, dividends, and major capex is done. Mx is on the same team now, and we’re down to 4 fleet types. I know it takes a little more than just reading the headlines, but if revenue is in the neighborhood of what it used to be, then we’ll be fine. If this is a multi year slump, then yes, we’ll sink.
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05-25-2020, 04:21 AM
#43
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Originally Posted by Excargodog
Why not? The above shows that AA doesn’t NEED to declare bankruptcy, but it doesn’t show that they WON’T declare bankruptcy. Republic was still operating in the black a few years back when they declared bankruptcy to rid themselves of their 50 seater contracts.
if it is ever ADVANTAGEOUS for management - any management - to declare bankruptcy, you better believe they will at least consider it.
if it is ever ADVANTAGEOUS for management - any management - to declare bankruptcy, you better believe they will at least consider it.
Do people forget how Doug has been getting paid for the last 4 years or so. It’s not to his advantage to declare bankruptcy.
05-25-2020, 04:25 AM
#44
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Originally Posted by bababouey
There will be no buybacks, dividends, and major capex is done. Mx is on the same team now, and we’re down to 4 fleet types. I know it takes a little more than just reading the headlines, but if revenue is in the neighborhood of what it used to be, then we’ll be fine. If this is a multi year slump, then yes, we’ll sink.
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05-25-2020, 04:43 AM
#45
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Originally Posted by sumwherelse
If revenues haven’t returned by 2022 or 2023 we’re all in trouble.
Yes, that would likely mean we’re in a deep recession or maybe a depression. In that case then we’re all living in the sewers with Dennis Leary waiting for the right time to steal Taco Bell scraps.
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05-25-2020, 04:47 AM
#46
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Originally Posted by bababouey
Yes, that would likely mean we’re in a deep recession or maybe a depression. In that case then we’re all living in the sewers with Dennis Leary waiting for the right time to steal Taco Bell scraps.
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05-25-2020, 05:51 AM
#47
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Originally Posted by bababouey
There will be no buybacks, dividends, and major capex is done. Mx is on the same team now, and we’re down to 4 fleet types. I know it takes a little more than just reading the headlines, but if revenue is in the neighborhood of what it used to be, then we’ll be fine. If this is a multi year slump, then yes, we’ll sink.
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Q1 2020 only saw a drop of roughly 25% in revenue from Q4 of 2019 and they lost 2.2B. The Q2 and Q3 numbers are going to be a bloodbath. Taking on massive long term debt, when you're already highly leveraged, and have essentially no revenue isn't a viable strategy for long term survival. The problem is that they can't really liquidate assets, either, as there are no buyers.
05-25-2020, 06:07 AM
#48
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Originally Posted by Flying101
Fake News! As of June 2019 Parker owns 2.2 million shares of AA stock, most he’s ever owned. Not sure where you’re getting $150M? If he sold AA at its peak (2007 @ $54) he would walk away with $118M.
However, they fail to mention that AAL's legal Ponzi stock-buyback scheme saw Parker's 2016-2018 take-home pay rocket to $70.2 million. (According to the Financial Times, Parker’s total award from selling stock since 2013 is $150 million). It’s not bad for Parker, but it’s horrendous for AAL employees, shareholders and American taxpayers who will be stuffed with a $20 billion bailout. Fair? Not on your life
05-25-2020, 06:22 AM
#49
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Originally Posted by JulesWinfield
Most analysts, including the airlines themselves, are thinking it will take years to get back to 2019 numbers, if ever. I'm not reading headlines, I am reading the financial data, like the Balance Sheet and Income Statements.
Q1 2020 only saw a drop of roughly 25% in revenue from Q4 of 2019 and they lost 2.2B. The Q2 and Q3 numbers are going to be a bloodbath. Taking on massive long term debt, when you're already highly leveraged, and have essentially no revenue isn't a viable strategy for long term survival. The problem is that they can't really liquidate assets, either, as there are no buyers.
Q1 2020 only saw a drop of roughly 25% in revenue from Q4 of 2019 and they lost 2.2B. The Q2 and Q3 numbers are going to be a bloodbath. Taking on massive long term debt, when you're already highly leveraged, and have essentially no revenue isn't a viable strategy for long term survival. The problem is that they can't really liquidate assets, either, as there are no buyers.
We don’t need to get back to 2019 level to make money. You are ignoring the fact that all the majors were making money for quite a few years prior to this downturn. Profits are there even at 2015 levels.
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05-25-2020, 06:30 AM
#50
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Originally Posted by C5Drvr
We don’t need to get back to 2019 level to make money. You are ignoring the fact that all the majors were making money for quite a few years prior to this downturn. Profits are there even at 2015 levels.
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Correct, we made $7.6 billion in 2015, it can be done again.
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