To say that AMR has a bad network is madness. They have a dream sheet domestic hub structure. Each hub they have is a top six O&D city. Their South America route structure has done nothing but make gobs of cash since Juan Tripp first laid them out 80 years ago. It's a cash register...all you have to do is ring the bell.

Maybe what Alfa is saying is hope is lost and we should just concede to being the regional boys to the JVs, flying to 50 cities while we get squeezed from the top, middle and bottom, because it's the only way the people who are currently on the list will avoid living in refrigerator boxes.

We're not playing to win...heck we're not even playing "not to lose". It seems like we've settled into a strategy of "controlled attrition", where it's apparently OK that planes and pilots are not replaced.

Nu

According to my shoddy research, Carl is correct, that AMR has over $29B in total liabilities, but it's long term debt is $10.2B.

AMR Balance Sheet | AMR Corporation Common Stock Stock - Yahoo! Finance

So doing an apple to apples comparison with DAL's balance sheet, DAL has $41.8B intotal liabilities with long term debt of $12.6B.

DAL Balance Sheet | Delta Air Lines Inc. (New) Comm Stock - Yahoo! Finance

I'm not sure what the difference is between long term debt and total liabilities, except that perhaps total liabilities are off set by assets, but that's just a guess.

I suppose that what drives a company to bankruptcy is negative cash flow, or more simply, the cost to produce a seat mile exceeds the revenue from that seat mile. So which has a bigger impact on cash flow, total liabilities, or long term debt?

What I find interesting is that when we're in bankruptcy, we say it's a revenue problem, but when AMR is in bankruptcy it's a cost issue. I suppose both could be correct statements, but are they?

Numbers keep telling us that you are correct. Anyone know if the rumor is true that Delta's capacity plans were actually based on a stolen copy of AOL's plan for their dial up subscription business?

Yes

Then you have the odd case of an airline like Frontier, who was doing ok, but entered bankruptcy mostly because everyone assumed they would lose the battle between SWA and United ... based on that assumption they lost the ability to secure capital needed to continue operations.

Figuring out Delta's liabilities would be a complicated mess. We just tried to figure out the obligations related to long term capacity purchase agreements from the plethora of small jet operators in DCI and were hitting figures in the neighborhood of 30 billion for the RJ stuff. I doubt that generate positive cash flow, but it does help fill our jets on the portion of Delta flying we perform.

I'm saying it is possible Delta will try to reorganize, but obviously the market disagrees. Our stock is up significantly.

Mostly I think Alpha is correct. What I think Alpha misses is that our revenues are dependent on the same market as American. We have a better network, which helps, but the underlying factor is domestic employment and GDP. To that extent, all airlines are in the market together.

Latest target I saw was this week. FWIW, I have my scheduled training now showing in icrew.

Alright, that's pretty funny right there.

Carl

They do mean something imo. They mean that at some point the creditors and going to decide that AMR's revenue gneration plan going forward sucks, and they will look outside of AMR to increase their odds of issuing lines of credit. That is why I suspect that we will see fragmentation attempts from LCC maybe DAL, UCAL and they may be sustained by their creditors demands for more than just cents on the dollar but a business plan that secures the remaining debt going forward. To me that is what ALFA is getting at. They have a revenue problem and if the creditors are smart they will force them to deal with it, or force them to see assets to those who can.

AMR's saving grace is that it is a Presidential election year. More job loss sucks during this point in the cycle.

What he is saying is that their route network means little if it cannot be fed by JV's etc.

ALFA, (ACL and Carl too),

What Carl says pretty much parallels the analysis done by the Boyd Group. Here's a link:http://www.aviationplanning.com/Imag...%20Reality.pdf

You may disagree with Boyd's conclusions, but Carl is not "out in left field", so to speak, with his comments as you asserted so aggressively.

My prediction is rather than admit Carl was on to something you will follow the DALPA tactic of trying to discredit the messenger (Boyd).

Bankrupt AMR: Cut Flights, Possible Merger

DALLAS TheStreet) -- The bankruptcy of American Airlines and parent AMR(AMR_) could mean fewer flights and fewer seats for passengers, even on some prestigious routes, as well as a turning point for airline investors. Competitors' shares rose, with the three remaining legacy carriers registering double-digit gains last week.
More on AMR

Passengers in a variety of markets could be impacted.
Passengers are likely to lose routes with an American Airlines bankruptcy, but Delta, JetBlue, US Airways and United are already seeing stock gains.

American's principal hubs in Dallas, Miami and Chicago should escape the bulk of the capacity trimming, and American may also be hesitant to reduce flying between the U.S. and the U.K., Ticonderoga analyst James Higgins says. But flight cuts should be steeper in markets outside the three major hubs, he says, and various analyst agree they see impending cuts in Los Angeles and New York -- which despite being keys to American's cornerstone strategy are not places where it dominates.

In May, in a controversial report, Avondale Partners airline analyst Bob McAdoo wrote that American loses $1 billion annually by flying too much in losing markets.

"More important than its costs are AMR's capacity decisions, its market selection and its unwillingness to halt or reduce flying in markets that are losers," McAdoo said. Those losers, he said, include many of the carrier's highest-visibility, most prestigious routes: New York to London; New York to California; Chicago to Delhi, Beijing and Shanghai; and Miami to Buenos Aires. The 10 worst markets lose $450 million a year, he said.

Similarly, American operates 10 daily flights in the New York-Los Angeles market, losing $70 million annually, and five daily flights in the New York-San Francisco market, losing $54 million annually, McAdoo wrote.

In its first week in bankruptcy, American has signaled modest capacity cuts via interviews with executives and in its filing, which shows 24 planes already retired to desert storage facilities and more aircraft lease rejections coming.

In a report issued Monday morning, Higgin wrote "We expect all U.S. airlines to benefit from AMR's surprise Chapter 11 filing, largely because we believe AMR will meaningfully reduce capacity," probably in the 10% to 15% range.