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Old 05-14-2020, 09:58 AM   #1  
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Default American finds cash cushion

https://airlinegeeks.com/2020/05/13/...1vnTcXmqKIydUo

Adding it all up including assets article says American will have $17.4B in liquidity.
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Old 05-14-2020, 10:20 AM   #2  
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written by a college student ?

back to regular programming, which we have enough of...
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Old 05-14-2020, 10:28 AM   #3  
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Can’t help but wonder if the college student (and student pilot) realizes how much that ‘unencumbered equity’ in aircraft and spares has lost in value?

With airlines in bankruptcy and aircraft parked all over the world the used market in aircraft and aviation support equipment has taken a far bigger hit than the stock market has. I doubt if those aircraft that are being retired by American, United, and Delta could bring even a fraction of what he is assuming they could.
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Old 05-14-2020, 10:40 AM   #4  
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Quote:
American also has an estimated $10 billion in unencumbered assets, including $2 billion in spare aircraft parts, $5 billion in airport slots, $1.8 billion in A/R and $1.2 billion in real estate. In total, that means that the carrier has access to at least $17.4 billion worth of liquidity before transactions.
the author needs to realize you don't "have" anything until you exchange it for cash. I doubt anybody will need a bunch of airport slots or real estate anytime soon. my backyard pool is paid for and "unencumbered" not attached to my mortgage. So what. I will never sell the pool only, to raise cash.

Also, Eastern burned the furniture to keep the house warm, and it did not work out for them. Who are the selling the parts to ? Delta and United do not need any parts. European airlines are broke. Frontier, Spirit are flying a new fleet. So how is AA converting the "value" of parts into cold cash ?

they aren't.

bad article
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Old 05-15-2020, 12:11 PM   #5  
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I failed to read about the author before posting that, I had assumed it was a professional journalist. He makes the classic mistake of equating "book value" with this new reality. Spare parts, there's thousands of spare parts sitting on taxiways all over the place. Slots, who needs em? Ditto for real estate. With all the bad news I jumped on this seemingly good news article without looking at it closely enough.

I posted an article about credit default swaps. AA is at 54%, i.e. the bond holder has to pay $54 for every $100 of AA bonds they want to insure against loss. Several other airlines are less than 10%, the 2nd highest was 24% I think. Barring further Gov intervention I think BK is inevitable for American. I'm surprised how progressive they're being on offering packages to the pilot group, I'm a little bit suspicious they're going to try to take it all away in Chapter 11.

I'm no longer affected since I took early retirement (PBGC) upon recall to USAirways in 2007, only thing I'd lose is non-rev which I've only used once in 3 years anyway. I'm on Loss of Medical from my post-USAirways job for another 5 years so short of the major insurance company underwriter going belly up I should be fine. But I have friends from my 1989 USAir class who are still at AA. Some of them could be downgraded in BK. One of them had his son get hired at AA in the past year, the kid is still in his 20's. I remember thinking about how he's got it made. Now he'll probably be out of a job.
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Old 05-20-2020, 12:59 PM   #6  
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I hear Doug Parker also took money out of a "Lending Facility" that's secured by Senior Mamma flight attendant condo size suitcase trailers.
Should push them through 2021 no problem.....
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Old 05-20-2020, 01:07 PM   #7  
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They could also “forget” to sign the checks to the creditors, that’ll buy us a few days.


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Old 05-20-2020, 03:09 PM   #8  
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"STALL STALL STALL"
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Old 05-20-2020, 10:36 PM   #9  
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Quote:
Originally Posted by bababouey View Post
They could also “forget” to sign the checks to the creditors, that’ll buy us a few days.


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Hello.... No here American
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Old 05-21-2020, 04:14 AM   #10  
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Quote:
Originally Posted by senecacaptain View Post
the author needs to realize you don't "have" anything until you exchange it for cash. I doubt anybody will need a bunch of airport slots or real estate anytime soon. my backyard pool is paid for and "unencumbered" not attached to my mortgage. So what. I will never sell the pool only, to raise cash.

Also, Eastern burned the furniture to keep the house warm, and it did not work out for them. Who are the selling the parts to ? Delta and United do not need any parts. European airlines are broke. Frontier, Spirit are flying a new fleet. So how is AA converting the "value" of parts into cold cash ?

they aren't.

bad article
Delta raised 3.5B selling bonds, using gates, slots, and routes as collateral. They closed in late April.
I doubt AA could, already have too much debt elsewhere, plus I think Delta went with a private issuance so they wouldn't have to withstand public scrutiny. Could be 75/76 spare parts and "Amazon", UPS and FedEx could buy them.
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