It’s a gamble, just like JetBlue was originally back over 20 yrs ago. Have not seen the pay, but Neeleman will likely offer productivity incentives. Nothing against the AA folks, but according to CNBC interview $42B in debt; AA will have to shrink to pay down debt, DL and UA have already said they will shrink. If you get hired at Breeze now, likely before AA, UA, DL furloughs (maybe, if they furlough). But it will get very competitive fast if furloughs actually happen. Breeze will fill a gap in the recovery, just gotta ask yourself is it worth the gamble.

 

The majority of their debt is from buying new planes.... a strategic bankruptcy to renegotiate the loans, consolidate their three regionals into one, and divest themselves of dead debt is not out of the question. In fact, they'd be smart to do it soon before passenger demand picks back up.

 

Indeed. I don't think they will hurry because it will hurt executive compensation. But the first of the big 3 out of bankruptcy will be in the best position to compete. AA has the advantage of a new fleet and can operate longer without needing anyone to finance new orders. Perhaps DL and UA have tricks of their own. We shall see.

It matters little since most of us are stuck where we are. But if you are nervous; try Breeze.

 

I concur. You are a good and insightful person.

 

I think AA just crossed the Rubicon on executive compensation and stock buybacks by taking the CARES loan money. They now have little disincentive to bankruptcy and a lot to gain.

 

They could lose their jobs and/or their company, and their lucrative severance packages in the process. The process is not tilted as much in management's favor as it was in 2007 before the laws changed.

 

I believe their highest ever profit was in 2019, which was right around $3billion. So how long is it going to take them to pay off $40 billion in debt? At this level of interest?






Trust me, I bear no ill will whatsoever toward AA or any of it’s people, but I simply don’t see how they get out of a hole that deep.

 

I didn't say there was any way out of the hole, just that BK is not as easy and convenient for the execs as it used to be.

Whatever else you say about DP, at least he actually WANTS to run an airline. My take is he'll try to avoid it, but it's a loooong uphill slog.

 

The opportunity for breeze to blow up is huge. They have dirt cheap planes, sim time, pilots (unfortunately), and a very leveled competition. They can make money very easily on partially filled planes. They will start small and extremely nimble and have the chance to grow with the recovery.

oh yeah, also, right now mom's and toddlers are getting booted off planes across the board, no fly lists have increased due to the mask fighting, and people are generally annoyed with the airlines and their constant virtue signaling.

People will be ready to try something new: an airline marked by easy to use technology, no middle seats, and super friendly crews who know they won't get a second chance to make a first impression. It's gonna be a very successful start up. This is the older more experienced Neeleman, but still trying to "bring humanity back to air travel" in a way - and once again, his timing is impeccable.

 

So those people are all going to fly on Breeze? They need more than that specific genres to be popular. I’m not saying Breeze doesn’t have the economic odds to give them the low overhead to ramp up, but we’re seeing 1970’s level traffic right now and all the airlines are fighting for pax with record low fares. This is not 2001, or 2008. It’s much worse and much different. Personally I don’t think Neelman (Breeze) will be AS successful as other times.