Touché



Filler

 

While I don’t deny that the 3 wholly owned regionals are/will be likely for sale, I can’t help but wonder who would buy any airplanes right now?

If things are so dire at AA that selling their regional airplanes at pennies on the dollar is what it comes to why would anyone agree to purchase airplanes and fly for them? No one is going to spend piles of cash on RJs when most legacies were scoped out under their existing contract as it is.

Riddle me this... How does a corporation with well over $40B in debt and no hope for near-term profitability that is bleeding cash convince a creditor to give them DIP financing? And how do you convince a court and the creditors that you can make good on your debts with no real ability to make a profit. AA’s cash runs out by the summer. Things aren’t likely to be significantly better by then. So what do all of you think the plan is? More government money?

As crazy an idea as it may seem to many of you, I think the idea that AA may be in a liquidation scenario here is becoming more real. At the very least it’s going to get much more painful before it gets better. Notice no one else is furloughing? They don’t need to outrun the bear, they just need to outrun the slowest runner...

 

Way too pessimistic. Have a few drinks and relax, then look at the TSA numbers increasing 5-7% week over week, extrapolate that out and airlines will likely be at zero cash burn around the holidays or early spring and as the lockdowns go away and people relax things will improve.

 

I actually agree with you Seneca. It’s easy to throw fear grenades and cover it with the fact that you’re a finance guy “in the know” when all you are is a PSA guy not in direct harm of furlough. Chris, we all know your opinion, so do us a favor and zip it AA is not in any near term danger of liquidation. As for Chapter 11, maybe at some point? It depends on factors that are beyond everyone’s controls right now.

 

Ahh so because you don’t like what I have to say I should, “zip it?” Interesting. And what do you have to add to support your viewpoint of “maybe” Chapter 11 and never a liquidation?

Name a bankruptcy that culminated successfully for a corporation in this much debt, with so little left to leverage, and without much hope for profitability in the near to mid-term future...

As for Seneca’s comment about 5-7% increases in passengers that does not equal revenue. The virus is surging in Europe and parts of Asia. Scientist fear a fall wave here. We are likely to see further lockdowns and restrictions in areas... United, Southwest, and Delta have all said that recovery won’t begin until late 2021 at the earliest. A vaccine needs to be available, trusted and widespread. That doesn’t happen quickly. Never mind businesses not allowing travel (mostly for litigious reasons) and international travel at a stand still. Zero cash burn around the holidays

But hey I’ll just “zip it”. My opinion doesn’t matter.

 

I get the impression that chrisreedrules is hoping for it. There are a number of posters like that on APC - they’re unhappy with their lives, so when bad stuff happens to others, it somehow validates their misery.

 

The situation is dire, but this isn’t 1989, there are only 3 legacy carriers left, none of them will liquidate. AA is in an awful position, and we certainly got caught with our pants down having this much debt. However, the hasn’t been a major Ch 7 since Eastern, this company will survive in some form, but your pessimism is noted.

 

old story:

The same sort of thing applies to people who are more pessimistic or optimistic than you. In fact, military intel (yes, I know, an oxymoron) tries to give their leaders three scenarios, best case, worst case, and middle case. All three are helpful for strategizing and tactical planning.

 

Not at all. Quite the contrary. I have spent a lot of time reflecting this past week. And I would give a lot to go back to just a year ago. Just a completely different sentiment in this industry. Whether I flow or don’t flow to American my family will be fine. I hope the same for all of us. I certainly don’t wish ill on AA or any of its employees. But I refuse to hide from uncomfortable facts. Best of luck to us all.

 

I do think you need to smoke some weed and chill out.

But, I also think if you aren't making some very wise financial decisions, and saving your money, you're a f*cking idiot.