View Poll Results: Will AA declare bankruptcy?
Yes
219
70.65%
No
91
29.35%
Voters: 310. You may not vote on this poll
Bankruptcy
10-20-2022 | 08:06 AM
#1311
Gets Weekends Off
Joined: Dec 2019
Posts: 1,318
Likes: 0
10-20-2022 | 08:11 AM
#1312
Line Holder
Joined: Oct 2010
Posts: 1,990
Likes: 184
I'm not a fan of flexing nuts when it comes to bankruptcy - I wouldn't wish it on anybody and although I'm not superstitious, as cyclical as our industry can be I don't like to poke the bear either.
As The Wolf in Pulp Fiction says, "Let's not start sucking each other's d***s quite yet!"
As The Wolf in Pulp Fiction says, "Let's not start sucking each other's d***s quite yet!"
10-20-2022 | 08:13 AM
#1313
Perennial Reserve
Joined: Jan 2018
Posts: 14,237
Likes: 254
Most of that debt - incurred at a coupon as low as 3.5% - is going to have to be refinanced at current rates as it matures over the next several years. They need all the liquidity and profits they can get to pay down that debt or they’ll be refinancing at current rates for b- rated companies which are about 14-15%. And the fed is threatening another 3/4% jump this quarter.
I’m not anti-AA, I just realize the box they’ve gotten themselves in. The AA CFO has pretty much said the same. The headwinds may not be insurmountable, but they are definitely substantial. When quarterly debt service interest actually starts to DECREASE you’ll know they’ve turned a corner. That hasn’t happened yet.
10-20-2022 | 08:20 AM
#1314
Gets Weekends Off
Joined: Mar 2021
Posts: 2,847
Likes: 212
What? A $483 million profit? That’s a GOOD thing. Currently, AA is paying a half billion a quarter in interest expense.
Most of that debt - incurred at a coupon as low as 3.5% - is going to have to be refinanced at current rates as it matures over the next several years. They need all the liquidity and profits they can get to pay down that debt or they’ll be refinancing at current rates for b- rated companies which are about 14-15%. And the fed is threatening another 3/4% jump this quarter.
I’m not anti-AA, I just realize the box they’ve gotten themselves in. The AA CFO has pretty much said the same. The headwinds may not be insurmountable, but they are definitely substantial. When quarterly debt service interest actually starts to DECREASE you’ll know they’ve turned a corner. That hasn’t happened yet.
Most of that debt - incurred at a coupon as low as 3.5% - is going to have to be refinanced at current rates as it matures over the next several years. They need all the liquidity and profits they can get to pay down that debt or they’ll be refinancing at current rates for b- rated companies which are about 14-15%. And the fed is threatening another 3/4% jump this quarter.
I’m not anti-AA, I just realize the box they’ve gotten themselves in. The AA CFO has pretty much said the same. The headwinds may not be insurmountable, but they are definitely substantial. When quarterly debt service interest actually starts to DECREASE you’ll know they’ve turned a corner. That hasn’t happened yet.
10-20-2022 | 08:27 AM
#1315
Perennial Reserve
Joined: Jan 2018
Posts: 14,237
Likes: 254
Oct. 19, 2022Investors in Spirit Airlines voted on Wednesday to sell the carrier to JetBlue Airways, a combination that could reshape the airline industry in the United States by creating a more viable competitor to the four dominant carriers.
The preliminary vote results represent a victory for JetBlue, which has struggled for years to find a path to rapid expansion and whose surprise bid for Spirit disrupted an earlier offer by Frontier Airlines. The airlines said they expected to close the acquisition, which values Spirit at $3.8 billion, no later than the first half of 2024.
The preliminary vote results represent a victory for JetBlue, which has struggled for years to find a path to rapid expansion and whose surprise bid for Spirit disrupted an earlier offer by Frontier Airlines. The airlines said they expected to close the acquisition, which values Spirit at $3.8 billion, no later than the first half of 2024.
Minus $8.4 Billion last time I looked.
10-20-2022 | 08:35 AM
#1316
Perennial Reserve
Joined: Jan 2018
Posts: 14,237
Likes: 254
I'm not a fan of flexing nuts when it comes to bankruptcy - I wouldn't wish it on anybody and although I'm not superstitious, as cyclical as our industry can be I don't like to poke the bear either.
As The Wolf in Pulp Fiction says, "Let's not start sucking each other's d***s quite yet!"
As The Wolf in Pulp Fiction says, "Let's not start sucking each other's d***s quite yet!"
or wise whatever gender anyway.
10-20-2022 | 12:46 PM
#1318
Perennial Reserve
Joined: Jan 2018
Posts: 14,237
Likes: 254
FEDERAL RESERVE
PUBLISHED THU, OCT 20 202212:06 PM EDTUPDATED 2 HOURS AGO
Philadelphia Federal Reserve President Patrick Harker on Thursday said higher interest rates have done little to keep inflation in check, so more increases will be needed.
“We are going to keep raising rates for a while,” the central bank official said in remarks for a speech in New Jersey. “Given our frankly disappointing lack of progress on curtailing inflation, I expect we will be well above 4% by the end of the year.”
The latter comment was in reference to the fed funds rate, which currently is targeted in a range between 3%-3.25%.
Markets widely expect the Fed to approve a fourth consecutive 0.75 percentage point interest rate hike in early November, followed by another in December. The expectation is that the Federal Open Market Committee, of which Harker is a nonvoting member this year, will then take rates a bit higher in 2023 before settling in a range around 4.5%-4.75%.
Harker indicated that those higher rates are likely to stay in place for an extended period.
“Sometime next year, we are going to stop hiking rates. At that point, I think we should hold at a restrictive rate for a while to let monetary policy do its work,” he said. “It will take a while for the higher cost of capital to work its way through the economy. After that, if we have to, we can tighten further, based on the data.”
Inflation is currently running around its highest level in more than 40 years.
Fed’s Harker sees ‘lack of progress’ on inflation, expects aggressive rate hikes ahead
PUBLISHED THU, OCT 20 202212:06 PM EDTUPDATED 2 HOURS AGO
Philadelphia Federal Reserve President Patrick Harker on Thursday said higher interest rates have done little to keep inflation in check, so more increases will be needed.
“We are going to keep raising rates for a while,” the central bank official said in remarks for a speech in New Jersey. “Given our frankly disappointing lack of progress on curtailing inflation, I expect we will be well above 4% by the end of the year.”
The latter comment was in reference to the fed funds rate, which currently is targeted in a range between 3%-3.25%.
Markets widely expect the Fed to approve a fourth consecutive 0.75 percentage point interest rate hike in early November, followed by another in December. The expectation is that the Federal Open Market Committee, of which Harker is a nonvoting member this year, will then take rates a bit higher in 2023 before settling in a range around 4.5%-4.75%.
Harker indicated that those higher rates are likely to stay in place for an extended period.
“Sometime next year, we are going to stop hiking rates. At that point, I think we should hold at a restrictive rate for a while to let monetary policy do its work,” he said. “It will take a while for the higher cost of capital to work its way through the economy. After that, if we have to, we can tighten further, based on the data.”
Inflation is currently running around its highest level in more than 40 years.
10-20-2022 | 02:58 PM
#1319
Banned
Joined: Jan 2008
Posts: 2,625
Likes: 0
From: Pilot
Well, it probably bolsters his case that the Fed itself is saying the same thing…
https://www.cnbc.com/2022/10/20/feds...kes-ahead.html
https://www.cnbc.com/2022/10/20/feds...kes-ahead.html
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