Bankruptcy
 

After flying with numerous pilots, a common trend of thought is that AA will declare bankruptcy. Another bankruptcy contract will continue to hurt qol for pilots as well as cripple other airlines.

what are your thoughts on probability of bankruptcy?

Dumb thread.

The company, and more importantly the union's E&FA committee has repeatedly stated that BK is not an imminent threat. By all means though lets listen to some guy who took Econ 101 35 years ago and thinks he knows what he's talking because he made money off Starbucks stock and reads Motley Fool once a month.

If we don't get some kind of demand return by end of summer/fall we are probably screwed, but so is everyone else.

Your captains probably don’t even consider the Miata to be a sports car. Can’t trust someone with that kinda judgement.

zeeeeeeeeeerooooo point in this conversation.

Wish the Yes was split into Chapter 11 or Chapter 7.

Or two separate polls, “Will...Chapter 11?” And “Will...Chapter 7.”

I think there is a good chance of CH11 ... with others to possibly follow not far behind.

If things drag out or if other unforeseen issues pop up ... ???

You have to convince a judge to file Chapter 11. with the amount of debt over 42 BILLION, and daily cash burn over 10 million, they have zero shot filing CH11, zero. If we can get a quick recovery it would be smart to file chapter 11 in American Airlines case, but I don’t see a quick recovery. With the democrats running the show for the next 2-4 years, spending will increase, inflation will increase, we’ll take our time with opening the country.

Also experts are projecting the price of oil to increase from $50 to $100 a barrel. Saudi Arabia announced cutback in oil production. The last time that happened was during the Bush administration because SA felt threatened. Now they’re feeling threatened by the Biden administration so they’re playing games again.

Anyone desiring to reorganize their business can file Chap 11 as long as they can pony up the $1039 or so necessary to file and the quarterly cost of a US Trustee.

Legally, anyone except a governmental agency, an estate, a nonbusiness trust, a stockbroker, a commodity broker, an insurance company, a bank, or an SBA-licensed small business investment company may file under Chapter 11. An individual may not file under Chapter 11 if he or she has had another bankruptcy case dismissed upon certain grounds within the last 180 days. As a practical matter, Chapter 11 is available to virtually any business or person able to afford the expenses of the case.

If the judge doesn’t like the reorganization plan or the creditors have valid complaints, he/she may not grant the filer relief from their debts, and may even reject the reorganization plan and appoint a trustee to manage the bankruptcy but the judge has no mechanism to simply refuse a filed petition as long as the person isn’t in one of the above prohibited categories.

Upon filing a voluntary petition for relief under chapter 11 or, in an involuntary case, the entry of an order for relief, the debtor automatically assumes an additional identity as the "debtor in possession." 11 U.S.C. § 1101. The term refers to a debtor that keeps possession and control of its assets while undergoing a reorganization under chapter 11, without the appointment of a case trustee. A debtor will remain a debtor in possession until the debtor's plan of reorganization is confirmed, the debtor's case is dismissed or converted to chapter 7, or a chapter 11 trustee is appointed.

https://www.uscourts.gov/services-fo...kruptcy-basics

I stand corrected let me rephrase.

You file THEN A judge approves the reorganization plan. The judge STILL HAS TO APPROVE your plan. I believe that only 10% of filings that are brought to a judge and requesting approval for chapter 11 are accepted.

Just because I file a lawsuit towards someone, does not necessarily result I’ll win the the case after being presented.

If you bring your plan of reorganization for your business to a judge with 42 billion in debt, and 10 million cash burn per day, GOOD LUCK having that approved.

The result of not receiving chapter 11 approval by a judge, would result in the dreaded chapter 7.

Wrong. Only 5% of Chap 11 bankruptcies are ever converted to Chapter 7, most often by the debtor themself if he/she thinks there will be more residual capital coming to them through liquidation than through reorganization. Judges approve pretty much any viable reorganization that appears that it will not take money away from secured creditors.

Lol! All this tells me is that 75% of the pilots on this thread are morons. Not surprising given the average pilot IQ.

why are u so smart... they are preparing

Newsroom - American Airlines Names Douglas M. Steenland to its Board of Directors - American Airlines Group, Inc.

I have been through CH11 with three different majors. I’m guessing you haven’t experienced your first.

I loved the job. However, the industry is a wild ride.

Overall I have been really blessed. YMMV

Are you just here to make things up hoping people
wont fact check you? Trying to make AA pilots feel bad because it makes your day seem less crappy?

This is spot on. The debtors and the company are pretty much those in charge, to work it out amongst themselves. The judge just basically sits back and lets it happen, only getting involved like a football referee does. If someone commits roughing the passer, the judge will get involved.

I have not been through any BK, and currently DL should hold over just fine. Care to share any feedback with your experience with riding through while the company files BK?

So I’m wrong because only 5% of chapter 11 bankruptcies are converted to chapter 7. Yeah listen that’s most likely so low because nobody bothers with chapter 11 when it’s inevitable chapter 7 is the best result for the parties. But that doesn’t make it “wrong”, it makes it “highly unlikely”.

So let’s take a look at the balance sheet of American Airlines Group. They $64.54 billion in total assets, which is losing value daily. Total debt last quarter was $41.2 Billion. In December they were burning a reported 25-30 million a day.

It would be interesting to find out how exactly the debtors would be restructuring. Also I question if American really owns 65 Billion in assets, I bet the debtors during the chapter 11 process would have it valued substantially less.

We get it, you work at Delta and are hoping for American to fail. I guess, we'll see. Not sure why you feel that you need to come in the AA and envoy forums and tell us over and over that you think AA is going to go into Ch. 7.

Not hoping for them to fail, but getting tired of the morons living in denial, and would love the conversation pointed towards restructuring plans rather than idiotic “flow” talk.

Why do you care?

Fixed it for you.

I think your hat is on too tight and it's restricting blood flow. Not good!

No, you are wrong because you simply pull numbers out of your@$$ with no attempt to be anything but incendiary.

So you can’t handle the truth now? Yikes. Those numbers are directly from last quarter, also the 25-30 million in cash burn was reported December 7th, 2020. My numbers are from reports.

Because I can. When a WI Packers fan watches a game between the Seahawks and Bears, do others at the bar ask him or her, “why are you even here? Why do you even care”. I can care about anything I want, as can you.

“All the experts say” 😂😂 please watch the video below.
https://youtu.be/fPMseMl6mYo

You’re no longer writing more than a few sentences I’ve noticed. I’d assume to prevent exposure to your horrific grammar.

Is that the second or third time you’ve cracked the hat joke? You need more material.

I never said you couldn’t care, it’s sad and pathetic though if you do since none of it concerns you. It is especially pathetic to go troll the regional forums about AA’s hypothetical demise.

You’re not very bright, or just very arrogant. Asking another individual why they care, then continuously insulting the individual for caring is an indirect way of asking the individual to stop caring.

Those aren’t the numbers I was referring to and you know it.

Look at my prior postings. I have been as frank (and accurate) as anyone about my concerns regarding AA, but I have posted facts, not BS about bankruptcy numbers which you clearly know nothing about, as demonstrated by the fact that you have crawfished after a couple of my corrections.

I am as supportive as the next guy about helping those coming here for information make informed choices. What I don’t support is someone neener-neenering people who have invested years of seniority in furthering their careers and had zero control over financing decisions their management made, especially when - absent a black swan event they couldn’t predict - there was nothing inherently unreasonable about those financial decisions at the time.

You, on the other hand, seem to take a positive delight in lying and twisting the knife - increasing the angst of people who lack any ability whatever to change the situation.

That being the case, this will be the last exchange of postings I will have with you. Go find a rock to crawl under.

https://www.forbes.com/sites/tedreed...h=17a77b125b7e

American accepted another federal loan, while Delta took on debt backed by SkyMiles. This is after taking a $5.4 billion federal loan through the CARES act. You're truly concerned about how one airline financed debt versus another? I don't know what you're trying to argue here.

Attacking my grammar doesn't make you look smart. It's yet another example of your pathetic fabrication when you're backed into a corner and can't think of anything else to say. Anyone reading can judge my grammar for themselves. You look like a fool

Sooooo did we go bankrupt yet? Someone let me know when it happens. Thanks.

What other numbers did I post? You can’t handle the truth and you’re correct you can’t control what American Airlines management decides from a financial aspect, but you should have been more informed on how terrible of a decision placing huge debt bets on buying the farm on new metal hoping we wouldn’t have another industry downturn. Play stupid games win stupid prizes.

Copy and pasting the definition of chapter 11 is called “copy” and “paste”, not listing facts. I’d love to see where you found the 5% statistic?

You better go hide under a rock with no internet connection because the news won’t be any better for the next year. Sorry to be the bad news bear. You specifically need a reality check.

Heed your own advice on your second paragraph. You’re only form of debate is to insult. I clearly listed American’s current debt situation which is horrific. You made a ridiculous claim that “all experts back American” you need to watch that video again, and please tell me one financial expert that had anything good to say about investing in American Airlines. The institutional ownership of American Airlines stock is at an ALL TIME LOW, the shorts are over 30 PERCENT. “Experts” are currently betting against not for.

Oh btw that Forbes article is from MAY 2020. You’re such a sorry clown 🤡 .

I've heard all of this before.

Schadenfruede

“Airline Shares Ended 2020 Down, But The Sky Did Not Fall And American Bankruptcy Chatter Turned Out To Be Nonsense”

Same author, writing this to essentially say “I told you so”. Sorry the date he wrote the first article didn’t please you though. Hopefully two weeks old is fresh enough for your liking?

🤡 🎩 🤡 🎩 🤡 🎩

https://www.google.com/amp/s/www.for...-happened/amp/

You crack me up kid. He told us all what exactly? Nobody in the forums was predicting BK for American until earliest June/July 2021? The Boeing CEO prediction was non sense from the start once you open the books.

This is the problem with American, they have maxed out all of their liquidity and by doing that have killed their business. How are you suppose to make money paying back interest rates on over 42 billion dollars of debt with some as high as 10%?

Currently they are burning 25-30 million a day sitting on 14 billion of liquidity. Debtors would NEVER let them run through all of their liquidity. But doing the simple math that gives them 1 year and 195 days to burn through it all.

The liquidity floor I've heard is 6-8 billion. Now, obviously, that's a wide number.

The problem is now they've got double digit bond yields, they need something to which to refinance that. That's not sustainable.

You may be right, but as a fellow double-breasted admiral I hope you’re wrong. American going into bankruptcy would be disastrous for everyone across the industry. Delta would immediately come crying to our MEC saying they needed lower pay rates to compete with AAs bankruptcy contract. We should be drinking a toast to all the legacies financial health, regardless of who we work for.

I’m sure that everyone at AA/DL/WN/UA was thinking that in 1980, or they were too busy licking their chops at the prospect of taking TWA/Eastern/Pan Am flying. I know my guess.

Or, all of the USAir guys demanding super seniority over regional pilots.

Or, all the APA stapling the TWA guys.

Funny how perspective changes when the machine gun splashes are walking up to your lifeboat.

https://www.macroaxis.com/invest/rat...-Of-Bankruptcy


Finessed, it's clear to everyone why you're here. At the end of the day, no one knows how this will play out. Regardless of that fact, you "would love the conversation pointed towards restructuring plans". You believe our company is going to go away, that we are all going to lose our livelihoods, lose our source of income that is essentially the foundation of our lives. This is your opinion, and because you believe it with conviction we must all have this conversation on your terms.

It's bad enough that you come onto AA threads and do everything in your power to make us feel like our jobs are at risk. It's really pathetic that you feel the need to constantly do it to the young pilots just starting out at regionals. You relish in making them squirm.

You made this profile less than two months ago just to rail on people and tear them down. Honestly, does this make you feel better about your life?

Yes. But what's significant is that the laws have changed since the last round of airline BK's.

BK is now less palatable for routine business purposes of escaping inconvenient obligations. The creditors are now more in control, as opposed to the DIP (the management team).

The good news with that (for labor) is it's riskier for management to file BK, they might lose the whole enchilada and their jobs and stock.

Bad news is that if they do file, it's easier for creditors to force liquidation if they think that will get them the most pennies on their dollar.

Good news, right now, is that airline assets are worth about their weight in crushed beer cans, so creditors might be more inclined to let the company re-organize and hope for a better return down the road, vice cash out while they'd be hard-pressed to give away the assets.