That is incorrect, AA ended 2020 with roughly 8.2B* in liquidity and access to an additional 7.5B in federal loans (500m of which they have already withdrew). That is how they are coming up with their liquidity number.

*Edited because I had to go back to the balance sheet to add it up

Uhhh, ended 4Q with 14.3 billion in liquidity and projecting 15 billion in liquidity at the end of first quarter 2021

Does anyone remember how much cash AMR had when it declared bankruptcy the last time? Wasn’t it around $8 billion or am I misremembering?

$24.72 billion in assets, $29.55 billion in liabilities. $4.1 billion in cash

It was, and that why the Judge called them out and made them pay common stock holders in the restructuring.

AMR shareholders made a killing (dallasnews.com)


and in other news looks like Redit is coming to rescue, just like GameStop.

American Airlines' shares surge as shorts squeezed after results | Reuters

They had the liquidity to last through at least mid 2012, probably beyond, but cutting labor costs immediately was too rich to pass up

Yes, that is accurate. What I am saying is that it is liquidity number they are accounting for the in press release is INCLUSIVE of the loan that they have yet to exercise from the government which is ~$7.5B. The previous post said it was $14.3B + the additional $7.5b in loans. That part is not true.

Liquidity on the balance sheet is typically Cash+Short term investments = Liquidity. In this case it’s roughly $6.8B plus the additional loans available to AAL. Sometimes this calculation includes net accounts receivable, which is how I came up with my number of 8.2 in my previous post.

In this case, 2020 was ended with $245M in cash, $6619M in short term investments. This means AAL has $6864m in liquidity, plus the additional $7.5B in loans that are available but not yet drawn. Approximately $14.3B.*

FWIW AAL rounds significantly so the numbers never exactly add up. Regardless, even on their “current assets” which are assets that may be sold in ~1 years time, American currently only has 11b on its books. They have to be including the CARES loan they haven’t utilized in their “liquidity” estimate.

*I had to edit this a few time to make some adjustments. I was able to get it add up regardless.

American will come out of this thing the General Motors of airlines. Still around, but in greatly reduced form.

They've run out of room to maneuver thanks to their debt and all their previous bankruptcies. And with all the strings attached to those federal dollars, their options are pretty slim. If and when they declare Chapter 11, the feds will force them to make the kinds of cuts that GM executives had to make back in '09. They will have to spin off everything that isn't essential to the business to pay down debt and move forward.

GM lost Delphi, GMAC, a whole slew of brands (Hummer, Oldsmobile, Plymouth, etc.) and shuttered their most inefficient factories to consolidate production. They extracted huge concessions from the UAW. They all but abandoned the passenger sedan segment to focus on the one thing that still made them money: trucks and SUV's.

I realize the analogy isn't 100% perfect, but as a blueprint of how a major American corporation integrated into the fabric of everyday life confronts an existential crisis, the GM bankruptcy and bailout is pretty instructive.

AAL has all kinds of hope and could come out of this shining, they need to ditch the drunk and put someone at the helm that does not run a Corporation on luck .

The "drunk" is not the problem. It's the people under him. It's the President who only sees things as black and white on a spreadsheet. It's the People Department (and it's head) that turns us into a touchy-feely diversification company instead of an airline. It's the middle managers who will do anything to protect their kingdom, lest they be forced to actually find a real job.

This place is broken.