Unless you can pay off the bonds as they become due, yes. How much of the debt do you believe you CAN pay off, remembering that liquidity can’t go much below $7 Billion without triggering penalties on some of the bond issues that will either require additional collateral or make the bonds subject to immediate redemption at par.

And paying debt off with a line of credit is pretty much like paying off an existing credit card debt with another credit card charging a higher interest.

 

“American ended the second quarter with $15.6 billion of total available liquidity. Total debt reduction continues to be a top priority and the company remains on track to reduce overall debt levels by $15 billion by the end of 2025.

In the second quarter, the company made $1.0 billion in scheduled debt and finance lease payments, including paying off the remaining $433 million outstanding balance of its $750 million unsecured senior notes that matured in June. To date, American has reduced its overall debt by $5.2 billion from peak levels in the second quarter of 2021.”


1b in scheduled debt payments and a profit. Seems like they are on track. I’d guess the 15b in debt reduction (and subsequent) is built into the financial operating plan, not consuming all profits (something you can’t seem to wrap your head around).

 

So they made payments they had to, good for them.

That 15.6 billion will be eaten pretty quick when Boeing starts delivering 787's again. It's easy to pay off debt when you don't have to pay Boeing for new planes. I'm interested to see the financials when Boeing begins to deliver planes on schedule again.

 

If only there was something you could do with airplanes so you could pay for them….

 

This thread is mind blowingly obtuse at times. Almost as if on purpose.

Are the doomsayers also moonlighting as travel bloggers trying to push the bankruptcy narrative right at the tail end of section 6???

 

AA has been losing money in their airplane flying business lately, so that doesn't do much good.
You can't sell more FF miles by having more airplanes.

 

And eventually you WILL have to give the stockholders some return on their investment:





Right now they actually have negative equity.

 

You could buy a few large airlines with the amount they are upside down.

This is the part people don't seem to understand. AA is rolling in crazy amounts of debt and liabilities, and they have to spend a crap ton of that "liquidity" on the capex coming up on the plane deliveries. Meanwhile they are very short staffed so they can't really capitalize on the growth those new airframes would allow.
When those deliveries come, their shareholder equity will go down, not up, because the liquidity they carry will be converted into airplanes, that start to depreciate from day 1.

I don't think people understand how far AA has to climb before they are even technically solvent.
The good thing for pilots is that there isn't much fat to cut from the AA contract, DL and UA have the ability to pay so much more and they need the pilots, so I doubt any AA mainline pilot will really feel anything if they go through Ch11.

 

Turns out selling junk bonds to buyback stock isn’t a good idea.

 

AA is carrying ~5b more debt than UAL
AA is carrying ~5b more in total liabilities than DL
(Their new order not included)

Are they going to be ok?

Btw…