Water under the bridge. Runway behind you. Altitude above you. Fuel already expended. Need I go on? Shoulda, coulda, woulda doesn’t affect the current situation.

That is an unGodly amount of debt service and the free cash flow to pay it off isn’t there, meaning a lot of that debt will have to be refinanced at whatever the current rates and bond ratings are available at the time it matures, and with depressed used airliner prices internationally decreasing used aircraft equity value and the current Fitch and S&P ratings would force debt service even higher. Nobody can predict with certainty how quickly - or if - international and business flying will rebound, but certainly in the situation that exists today it is advantage L/ULCCs. Widebodies can make lots of money when gainfully employed but the bonds that they were bought with are a money drain when they can’t be.

But don’t ignore that last quote. You can’t just divide liquidity by cash burn and say, we’ll, we’ve got so many months worth of liquidity because it ain’t a linear function. Bond buyers (and underwriters) hedge their bets. If liquidity falls below a certain amount, the dominos start to fall. Interest rates on the bonds ALREADY SOLD automatically go up or sometimes the owners are given an opportunity to redeem immediately while there is still liquidity to cover them. The devil is in the underwriting details. Bond buyers are CONSERVATIVE. If they believe crash is imminent, they can trigger a bankruptcy themselves to assure there is enough equity to cover THEIR holdings even if that means every stockholder gets nothing. So AA can’t let that happen so they sell more bonds backed by what assets they do have to maintain that contractually guaranteed liquidity.

AA isn’t selling bonds so they can do stock buybacks, or buy additional aircraft (although they will need them to replace the 20% of their seat capacity they have lost due to fleet retirements, or even for new interiors (which if business flying doesn’t rebound they’ll need to get their CASM down). Right now they are selling bonds to gain liquidity to stay above the threshold that will otherwise trigger additional costs on the bonds they’ve already sold. And if business and international rebound quickly it will probably work. If not, they are digging their hole deeper.

 

For all of you celebrating the payroll support program like it is a permanent solution we are going to be right back here in September going into what is a historically a seasonal low in the demand for air travel. Eventually the government is going to get tired of supporting salaries at these levels, and leisure travel where you compete with Allegiant for passengers certainly doesn't support them.

Bankruptcy reorganization and a pay cut is coming, like it or not.

 

The government is going to get tired of supporting 121 huh? Good thing the amount of money they have stolen from us through our taxes would pay off our national debt twice!

 

So this September will be historically low? As in worse than last September before the vaccines?

 

the smart money disagrees with you.

 

What is historically a seasonal low. Not a historic low compared to fall of 2020. The government isn't going to keep paying pilots multiple times a GS payscale to work in a perpetually subsidized industry.
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I nor anyone I know has been paid a dime by the federal government for flying commercial aircraft . I am not sure who is giving you false information.

 

You don't know anyone who flies for a U.S. airline?

 

Huh?

.......

 

Pilots are paid by the airline. My checks do not say US treasury, I doubt your do either.