AA Secures $5.5B Treasury Loan
09-25-2020, 04:53 PM
#1
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Joined APC: Dec 2017
Position: Retired NJA & AA
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AA Secures $5.5B Treasury Loan
https://finance.yahoo.com/news/ameri...210926494.html
This was from the original CARES Act. AA had until September 30th to decide whether to take the loan. They could get another $2B.
This was from the original CARES Act. AA had until September 30th to decide whether to take the loan. They could get another $2B.
09-25-2020, 06:28 PM
#2
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Posts: 923
AA pre Covid had $30B in debt, by far the most leveraged airline. After Covid, debt has gone up $10B+, and they have mortgaged pretty much every valuable asset. There is only one way this ends for AA, unless creditors negotiate outside of BK. A ver large chunk of debt is airplane debt, as we all know, they went on a huge spending spree the last 10-15 years. The only thing that might save AA from BK is aircraft financiers/lessors restructuring aircraft debt. Otherwise, how do you repay $40B back?
09-25-2020, 10:12 PM
#3
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Posts: 370
Originally Posted by C2078
AA pre Covid had $30B in debt, by far the most leveraged airline. After Covid, debt has gone up $10B+, and they have mortgaged pretty much every valuable asset. There is only one way this ends for AA, unless creditors negotiate outside of BK. A ver large chunk of debt is airplane debt, as we all know, they went on a huge spending spree the last 10-15 years. The only thing that might save AA from BK is aircraft financiers/lessors restructuring aircraft debt. Otherwise, how do you repay $40B back?
09-26-2020, 08:23 AM
#4
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Posts: 388
Originally Posted by beancounter
The other big two have very high amounts of debt too and at some point they’re going to have to go on a plane buying spree like we did. .
09-26-2020, 09:19 AM
#5
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Joined APC: Jan 2018
Posts: 11,501
Originally Posted by APCHCLIMB
I'm no expert. But, I have a feeling aircraft are going to be cheaper to come by in the future. Comparatively, they might get better deals than AA ever did.
And it’s actually a double-whammy. Not only are there cheap deals out there on new-ish used aircraft, but the collateral value of new-ish aircraft that you already own has taken a big hit too.
Sometimes timing is everything. Neeleman and his Breeze startup might have found it hard to even find pilots willing to work for the wages he isexpecting to pay only a year ago. Now they are flooding him with apps.
09-26-2020, 02:14 PM
#6
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Joined APC: Mar 2014
Posts: 569
Originally Posted by C2078
AA pre Covid had $30B in debt, by far the most leveraged airline. After Covid, debt has gone up $10B+, and they have mortgaged pretty much every valuable asset. There is only one way this ends for AA, unless creditors negotiate outside of BK. A ver large chunk of debt is airplane debt, as we all know, they went on a huge spending spree the last 10-15 years. The only thing that might save AA from BK is aircraft financiers/lessors restructuring aircraft debt. Otherwise, how do you repay $40B back?
Our stock was a laggard industry wide for years while the debt binge was happening. The BOD’s had no qualms about the goings on.
09-27-2020, 09:04 PM
#10
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Originally Posted by rickshaw
They should have bought all the old bed bath beyonds / pier1’s for a distributed Corp HQ. who you going to sell that billion $ thing to ? Where was the value in that? Ever.
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