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
11-09-2021 | 08:48 AM
#734
On Reserve
Joined: Sep 2021
Posts: 55
Likes: 1
That, and that allows for a certain level of rebooking and flexibility when IROPs and mx issues hit. In certain parts of the areas of the country PSA serves, the moment there's a delay or weather issue there's 2-3 other hubs in play that passengers can be re-routed through. I was in one of our larger outstations a while back when a LCC had to do a return to field for a mx issue. The outcome for passengers? A no questions asked refund and "Have a nice day," because the next flight wasn't for two days and was already full with whatever bargain basement fares they were advertising.
11-11-2021 | 01:28 PM
#736
In a land of unicorns
Joined: Apr 2014
Posts: 7,070
Likes: 102
From: Whale FO
11-11-2021 | 02:59 PM
#737
Perennial Reserve
Joined: Jan 2018
Posts: 14,237
Likes: 254
https://www.fitchratings.com/researc...-bb-27-10-2021
You sell pass through trust certificates rather than bonds because these certificates collateral ( in this case 21 A321 NEOs and 5 ERJ 175s) can go directly to the purchasers in the event of a bankruptcy and don’t risk taking a haircut like other asset classes. They way you can borrow money at a little lower ate than you would otherwise need from a straight junk bond sale.
From the Fitch Rating ‘definitions’ page:
Fitch’s credit rating scale for issuers and issues is expressed using the categories ‘AAA’ to ‘BBB’ (investment grade) and ‘BB’ to ‘D’ (speculative grade) with an additional +/- for AA through CCC levels indicating relative differences of probability of default or recovery for issues.
11-11-2021 | 03:06 PM
#738
In a land of unicorns
Joined: Apr 2014
Posts: 7,070
Likes: 102
From: Whale FO
Well, this:
https://www.fitchratings.com/researc...-bb-27-10-2021
You sell pass through trust certificates rather than bonds because these certificates collateral ( in this case 21 A321 NEOs and 5 ERJ 175s) can go directly to the purchasers in the event of a bankruptcy and don’t risk taking a haircut like other asset classes. They way you can borrow money at a little lower ate than you would otherwise need from a straight junk bond sale.
From the Fitch Rating ‘definitions’ page:
https://www.fitchratings.com/researc...-bb-27-10-2021
You sell pass through trust certificates rather than bonds because these certificates collateral ( in this case 21 A321 NEOs and 5 ERJ 175s) can go directly to the purchasers in the event of a bankruptcy and don’t risk taking a haircut like other asset classes. They way you can borrow money at a little lower ate than you would otherwise need from a straight junk bond sale.
From the Fitch Rating ‘definitions’ page:
11-11-2021 | 04:36 PM
#739
Perennial Reserve
Joined: Jan 2018
Posts: 14,237
Likes: 254
But MOST major airline credit ratings are junk or nearly so right now.
https://www.moodys.com/research/Mood...ges--PR_457882
Moody’s just reaffirmed AAs rating at Ba2 (non investment grade) and downgraded some of the older trust certificates from AA and US Airways to Ba3, most likely because the equipment used as collateral is now used and not as valuable as it once was.
Again, not unique to AA though.
Spirit is B1 which is still speculative:
https://www.moodys.com/research/Mood...ges--PR_448180
Delta just got Baa3 which is the lowest investment grade not considered speculative:
https://www.moodys.com/research/Mood...its--PR_456645
United is about the same:
https://www.yahoo.com/now/united-air...173908934.html
it’s a pandemic and everyone is going from a near stop trying to spin up to full ops despite a lot of restrictions and uncertainties. No airline has great credit rating right now - except maybe Janet…
11-11-2021 | 04:43 PM
#740
Banned
Joined: May 2017
Posts: 2,012
Likes: 0
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