AA Could Crash, but is it the only one?
 

Could......



An asteroid could destroy the Earth too...

I can't read any of these "news" stories with a straight face.

Quoting the CEO of a (very, very sad to say it) disgraced company like Boeing as an authority on anything except how to craft the perfect executive golden parachute kind of shows you don't know what you're talking about.

I agree. I would also add finance reporter are just lazy. AA has almost no short term debt to service and a good cash position. Our cash burn wasn’t too far out of line with everyone else and our airline size going forward matches up. As to our losses AA wrote off everything in Q1. They ate all the cost of aircraft retirements plus most of our pilot buyouts. As to your point about Boeing a big part of the reason our balance sheet got sideways was because of the max debacle.

Does it really matter who goes into chapter 11 first? The next 2 (or more) will quickly follow. They will have no choice. Heck, it might be advantageous to work for the airline that emerges first (meaning files first and navigates the process first). Good luck to us all.

Chapter 11 in this environment is quite likely to lead to chapter 7. A reorganization under chapter 11 is only possible if a business has a viable revenue stream. Currently that is not the case. Keep in mind when you file chapter 11 you end up on a cash basis for day to day expenses and financial control is passed to the creditors committee. Delta airlines came within 1 vote of going away when the creditors voted on Parker’s offer. The first airline to file chapter 11 will have a strong possibility of liquidation. All the major airline management teams will fight tooth and nail to avoid filing.

Hard to believe that the creditors will think owning a pile of airplanes and routes will be worth anything in the short-term, or that the government is ready for only 2 major international airlines. UAL is in a bad place with heavy Asia exposure also. Sooo, Delta is going to absorb all of Europe, Africa, Asia, South America, and Middle East? Unless Southwest or Spirit suddenly start buying widebodies, chapter 7 for either UAL or AAL seems unlikely.

In the past when major airlines have gone belly-up, another airline inevitably buys up all the resources. No one can do that here, and even if they could the feds wouldn't allow it on anti-trust grounds. Creditors are going to be better off with newly issued stock to replace some of the debt, especially in an environment where demand is going to rapidly increase (once a vaccine is out, demand will return - not to late 2019 levels, but enough so that everyone can return to profitability).

Stay strong. The next few months are going to be bad...

China Can!

This is a garbage article, and airbear, not a reason worthy of starting a new thread.

To expand on my earlier thought a lot of these pieces are like the “commercial” pilots or fighter pilots the news brings on TV after a crash. They have no idea what they are talking about but the media is desperate for content.