Leaving for a U/LCC
01-20-2020, 11:20 AM
#101
Gets Weekends Off
Joined APC: Jan 2017
Posts: 2,510
Originally Posted by THKooj
Putting your career on the line with an outfit like Spirit isn't the smartest thing in the world. Most especially if you are already at Envoy and have the flow in your back pocket. I wouldn't want to be there when the next recession or downturn hits. They don't have many pilots and you could easily find yourself furlough fodder. At Envoy you have the guaranteed job with AA and I can't figure out why anyone would leave that behind.
Just like in elementary school. If you can’t show the math, you get no credit.
01-20-2020, 11:25 AM
#102
Banned
Joined APC: Dec 2019
Posts: 270
Originally Posted by Al Czervik
Other than reserves... yes, they can. Like I said, I’m not an AA fan boy but if 4/5 year guys over there have the option to upgrade or fly Europe/Asia on the 777/787 it’s news to me. Just want guys to get the facts straight. If you’re enamored with spirit and frontier... I’d suggest working there. It really makes no difference to me.
01-20-2020, 11:43 AM
#103
Gets Weekends Off
Joined APC: Jan 2017
Posts: 117
Originally Posted by THKooj
Putting your career on the line with an outfit like Spirit isn't the smartest thing in the world. Most especially if you are already at Envoy and have the flow in your back pocket. I wouldn't want to be there when the next recession or downturn hits. They don't have many pilots and you could easily find yourself furlough fodder. At Envoy you have the guaranteed job with AA and I can't figure out why anyone would leave that behind.
The people at Spirit and Frontier actually believe their system will be the most resilient during the next recession. Spirit certainly did better than the legacies last time around.
When the price of oil goes up, do you want to spread that cost around an average of 80 passengers, or 186 passengers per flight?
Time will tell.
01-20-2020, 12:32 PM
#104
Gets Weekends Off
Joined APC: Sep 2005
Posts: 1,735
Originally Posted by THKooj
I wouldn't want to be there when the next recession or downturn hits. They don't have many pilots and you could easily find yourself furlough fodder. At Envoy you have the guaranteed job with AA and I can't figure out why anyone would leave that behind.
https://www.airbus.com/newsroom/pres...mily-jets.html
What did American do in Nov 2011? A Bankruptcy!
https://abcnews.go.com/blogs/busines...nto-bankruptcy
01-20-2020, 02:43 PM
#105
Perennial Reserve
Joined APC: Jan 2018
Posts: 11,481
Originally Posted by THKooj
Putting your career on the line with an outfit like Spirit isn't the smartest thing in the world. Most especially if you are already at Envoy and have the flow in your back pocket. I wouldn't want to be there when the next recession or downturn hits. They don't have many pilots and you could easily find yourself furlough fodder. At Envoy you have the guaranteed job with AA and I can't figure out why anyone would leave that behind.
Seriously, dude. AA has a long term debt of over $25 billion and Spirit has a long term debt of less than $3 Billion and you think Spirit is the one that needs to worry if a recession comes?
01-21-2020, 07:17 AM
#109
Gets Weekends Off
Joined APC: Mar 2017
Posts: 3,649
Originally Posted by ninerdriver
American takes out junk-grade loan to pay off other loan: https://www.moodys.com/research/Moodys-assigns-Ba1-rating-to-American-Airlines-new-term-loan--PR_417355
01-21-2020, 07:23 AM
#110
Perennial Reserve
Joined APC: Jan 2018
Posts: 11,481
Originally Posted by ninerdriver
American takes out junk-grade loan to pay off other loan: https://www.moodys.com/research/Mood...oan--PR_417355
and for those too blinded by the color of the kool-aid to trouble yourself with reading this I’ll give you a few excerpts:
RATINGS RATIONALE
The Parent's Ba3 corporate family rating reflects American's scale and competitive position as the world's second largest airline based on revenue, balanced by elevated financial leverage above 5x from a historically aggressive financial policy and an operating margin that continues to trail industry peers. Leverage remains elevated because of the heavy reliance on debt for repurchasing more than $11 billion of its shares while funding the majority of almost $26 billion of capital investment mainly from operating cash flow over the most recent five years. The rating also considers the company's inferior operating margin and weak free cash flow relative to its US legacy airline peers, Delta Air Lines and United Airlines.
The Parent's Ba3 corporate family rating reflects American's scale and competitive position as the world's second largest airline based on revenue, balanced by elevated financial leverage above 5x from a historically aggressive financial policy and an operating margin that continues to trail industry peers. Leverage remains elevated because of the heavy reliance on debt for repurchasing more than $11 billion of its shares while funding the majority of almost $26 billion of capital investment mainly from operating cash flow over the most recent five years. The rating also considers the company's inferior operating margin and weak free cash flow relative to its US legacy airline peers, Delta Air Lines and United Airlines.
The success of the company's strategy to grow ancillary revenues, increase fees for premium seating and services and more generally, sustain annual operating margin above 11% will be important drivers of expanding free cash flow that exceeds Moody's expectations
The ratings could be downgraded if: 1) the company continues to emphasize share repurchases rather than begin to reduce funded debt, 2) the EBITDA margin does not strengthen above the 17.4% at December 31, 2018, 3) the aggregate of cash, short-term investments and availability on revolving credit facilities is less than $5.0 billion, 4) unrestricted cash is less than $3.5 billion, or 5) Debt to EBITDA does not decline below 5x, Funds from Operations + Interest to Interest approaches 3x or Retained Cash Flow to Debt does not exceed 15%.
The term loan will be secured by landing and take-off slots, foreign gate leaseholds and route authorities for American's service to and from London Heathrow and certain other cities in Europe. The appraised value of the collateral, supported by the importance of London Heathrow as a hub, provides significant cushion against the minimum collateral coverage ratio of 1.6x.
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