View Poll Results: When does AA go bankrupt?
Q4, 2020
7
5.98%
Q1-Q2, 2021
29
24.79%
Q3-Q4, 2021
44
37.61%
2022
5
4.27%
2023 & Beyond
2
1.71%
“AA will never lose money again,” ENY flows < 5 years
11
9.40%
They won’t declare bankruptcy.
19
16.24%
Voters: 117. You may not vote on this poll
When Does AAG Declare Bankruptcy (Yet Again)?
08-31-2020 | 03:58 AM
#22
Banned
Joined: May 2017
Posts: 2,012
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Two network carriers could serve the purpose of getting people from Bozeman to Richmond or Bozeman to Paris quite easily. Reduced service, higher prices but it would work. The domestic medium and large market is well served by multiple competing airlines.
If I were betting, I’d say no chapter 7, but I don’t see any fundamental reason it couldn’t happen.
If I were betting, I’d say no chapter 7, but I don’t see any fundamental reason it couldn’t happen.
08-31-2020 | 04:05 AM
#23
Gets Weekends Off
Joined: May 2019
Posts: 191
Likes: 0
From: CA
Two network carriers could serve the purpose of getting people from Bozeman to Richmond or Bozeman to Paris quite easily. Reduced service, higher prices but it would work. The domestic medium and large market is well served by multiple competing airlines.
If I were betting, I’d say no chapter 7, but I don’t see any fundamental reason it couldn’t happen.
If I were betting, I’d say no chapter 7, but I don’t see any fundamental reason it couldn’t happen.
08-31-2020 | 06:44 AM
#24
Gets Weekends Off
Joined: Mar 2017
Posts: 4,140
Likes: 124
I’d agree. Chapter 7 is feasible but unlikely as the Big 3 are likely all ok that trajectory over the next 24 months if demand doesn’t making a meaningful return. The key is going to be self-preservation through COVID and then weathering the economic damage in the aftermath of the surmounting business closures, permanent jobs losses, potential for hyper inflation, etc. Chapter 11 makes sense as I do believe there may be government intervention to avoid a Ch. 7 scenario because of the importance these network carriers have in America. Still though, bankruptcy means concessions and doesn’t bode well for labor.
08-31-2020 | 10:15 PM
#25
Gets Everyday Off
Joined: Aug 2016
Posts: 6,995
Likes: 0
From: Fully Retired
I’d agree. Chapter 7 is feasible but unlikely as the Big 3 are likely all ok that trajectory over the next 24 months if demand doesn’t making a meaningful return. The key is going to be self-preservation through COVID and then weathering the economic damage in the aftermath of the surmounting business closures, permanent jobs losses, potential for hyper inflation, etc. Chapter 11 makes sense as I do believe there may be government intervention to avoid a Ch. 7 scenario because of the importance these network carriers have in America. Still though, bankruptcy means concessions and doesn’t bode well for labor.
09-01-2020 | 06:10 AM
#26
Gets Weekends Off
Joined: Jul 2017
Posts: 1,729
Likes: 0
09-01-2020 | 06:51 AM
#27
Gets Weekends Off
Joined: Feb 2018
Posts: 1,547
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From: Resigned
If one airline goes BK and extracts big $ concessions and debt relief they’re probably all going to have to follow suit, or be at a big competitive disadvantage imo.
It has already happened this way in recent memory, with certain carriers declaring bankruptcy even with a huge acquisition war chest sitting in the bank...
It has already happened this way in recent memory, with certain carriers declaring bankruptcy even with a huge acquisition war chest sitting in the bank...
09-01-2020 | 07:04 AM
#28
Perennial Reserve
Joined: Jan 2018
Posts: 14,081
Likes: 182
If one airline goes BK and extracts big $ concessions and debt relief they’re probably all going to have to follow suit, or be at a big competitive disadvantage imo.
It has already happened this way in recent memory, with certain carriers declaring bankruptcy even with a huge acquisition war chest sitting in the bank...
It has already happened this way in recent memory, with certain carriers declaring bankruptcy even with a huge acquisition war chest sitting in the bank...
^^^^^this unfortunately^^^^^
09-01-2020 | 07:08 AM
#29
Line Holder
Joined: May 2009
Posts: 515
Likes: 6
From: 756
besides gutting labor contracts - I am unsure what BK does for any of the majors right now? The problem is not a cost issue, but revenue (and deep furloughs take care even more of the cost). Sure - the companies are all trying to minimize cash burn, but thats because there is hardly any revenue. I'm just not sure what BK unlocks.
I think if we the industry is not pushing 70%+ by the start of Q3 '21 - liquidation or nationalization is much more likely than BK.
I think if we the industry is not pushing 70%+ by the start of Q3 '21 - liquidation or nationalization is much more likely than BK.
09-01-2020 | 07:24 AM
#30
Gets Weekends Off
Joined: Feb 2018
Posts: 1,547
Likes: 0
From: Resigned
besides gutting labor contracts - I am unsure what BK does for any of the majors right now? The problem is not a cost issue, but revenue (and deep furloughs take care even more of the cost). Sure - the companies are all trying to minimize cash burn, but thats because there is hardly any revenue. I'm just not sure what BK unlocks.
I think if we the industry is not pushing 70%+ by the start of Q3 '21 - liquidation or nationalization is much more likely than BK.
I think if we the industry is not pushing 70%+ by the start of Q3 '21 - liquidation or nationalization is much more likely than BK.
The problem is pretty much just debt. Few companies in any industry get into such problematic territory with debt as AAL is right now unless they’ve had a leveraged buyout or something. Now, AAL hasn’t had one of those, but you can use it as a heuristic for debt heavy companies and see that they have a 10x elevated risk of liquidation within 5 years.
The good news for investors is that they have a lot of valuable assets. The bad news is we work here.
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