Excargodog

That is certainly a non-trivial question. Even before COVID debt service was taking a big chunk out of the net profits.






It is going to be difficult for an even smaller airline to service a far higher debt, some of it at a far higher interest rate.

chrisreedrules

Which is partly why despite how many here think it impossible, my opinion lately has changed from “AA will go through bankruptcy” to, “AA is at a serious risk of liquidation”.

Rock meet hard place. There are no uncomfortable solutions to AA’s problems.

450knotOffice

Now that you two (Chris and Excargo) have decided through dozens and dozens of posts between the two of you here on the AA subforum that AA is almost certainly doomed to liquidation, do you have any suggestions? Or do you two just like to CONSTANTLY talk about about how bad it is here - a company neither of you two work for - just to read your own narratives?

Why the hard on for AA’s possible demise (in your opinion)?

Excargodog

First of all, no hard one about it, just legitimate concern. Nor has it been “dozens and dozens of posts” (at least not on my part, haven’t really been monitoring the other guy). Nor have I been commenting on how you are certainly doomed to liquidation, although I think Chapter 11 is a real threat. Nor have I commented on “how bad it is here,” merely expressing concern about the financial state. And why do you think that concerns me?

Because American is the canary in the coal mine, that’s why. Do you understand the analogy?
We are all working in the same mine and NOBODY wants the canary to die, because it puts us all at risk.

Just as pattern bargaining affects us all in negotiating, a single bankruptcy may well trigger pressure on everybody - even additional bankruptcies - as other managements try to use that to push concessionary contracts on the rest of us. Seriously, do you doubt for a moment that will happen if AA were to go bankrupt? So no, nobody is dancing on your grave - at least I’m not - I’m hoping that you guys pull through this. But you don’t have to be a financial genius to realize that this pandemic is hurting a lot of businesses that - through no fault of their own - have seen revenues cut tremendously.

Ultimately the airline business itself WILL survive, but COVID has been a kick in the teeth to all of us and we are all worried. Anybody who isn’t worried doesn’t have a good understanding of the situation.

TransWorld

This is true. You first sell product when you have inventory / capacity. Then you start working pricing and premium purchasers.

chrisreedrules

What Excargo said above...

ZeroTT

there’s a subset of high-fare demand that still exists, and the airlines still charge for it. The problem is many fewer people are buying those fares than before

Voski

Well said.

The longer this goes on, the more the odds are seemingly insurmountable for AAG. Everyone is bleeding cash regardless because revenue per passenger right now is nil. It's all about who can stymie cash bleed while maintaining or even growing market share. Even still, any Ch. 11 (or God forbid a Ch. 7 scenario) bankruptcy is going to send shockwaves throughout the industry.

bababouey

Do yall ever get tired of this or do you enjoy the never ending circle jerk of corporate balance sheet speculation?


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