Originally Posted by Claxstarr (Post 3177445)

Sounds like you’re talking about sterling airways...
https://flysterlingairways.com/news/

Wexford went chp 11 and restructured to buy Via in hopes of gaining their certificates operational status again...
Looks like they only owned one e145 and dry leased a couple other 120/145.

I hardly think they’re poised to picking up new CPAs since United has clearly signed the death certificate for the 145.

Anyone picking up new flying would most likely have owned airframes, an excess of trained and current pilots, a nationwide maintenance system, and cash in the bank....
not many fit that description.

Doesn’t look to me like AA is in a position to bargain on something like sterling.

Originally Posted by Excargodog (Post 3177785)

Not exactly how that works. Bond interest is market driven and that market is driven by ratings of the bonds from rating agencies vs offered yield. The $2.5 billion that AA sold this summer was rated at junk bond levels and as a consequence they had to offer a coupon of 11,75%. But even at that is didn’t sell at par, meaning a nominal $1000 purchase actually sold for less than that driving the debt service on what did sell up to 12%.

https://www.bloomberg.com/news/artic...l-to-2-billion

While AA has relatively little bond debt maturing this next year (I think one tranche of about $500 million and another of $750 million, IIRC) they will either have to refinance that at market rates or use $1.25 Billion of their current liquidity (a month of operations at current burn rates) to cover those expenses. But is the next year - 2022 - that the existing bonds really start maturing for a lot of the fleet modernization. Those bonds were sold at exceptionally low rates because times were good, the airline industry was doing well, and the bonds were collateralized by the new aircraft themselves. But now the aircraft are no longer new, and with all the airlines that have tanked, a glut of good late model used aircraft and even new ‘white tail’ aircraft have driven down used aircraft value. These bonds were always going to have to either be paid off (which AA won’t have the cash to do) or refinanced at a higher rate, but no one five years ago anticipated the rates would go as high as they are now, meaning AAs debt service, currently $1.3 Billion a year after this summers junk bond sale, is going to go higher.

To put that in perspective, AAs 2019 profit was about $2 Billion on revenues of about $46 Billion, not a profit margin that is going to allow them to pay off many of their maturing bonds. Their situation is analogous to someone with a lot of credit card debt keeping afloat by repeatedly transferring the balance from the old credit credit card to a new credit card, always at a higher interest.

Unless business and international flying comes back quickly - or they can sell those assets to someone else - they are going to find it hard to get refinancing at affordable prices.

Their current strategy, downsizing to profitability, won’t help flow much either...

Originally Posted by chrisreedrules (Post 3177862)

For those just tuning in this sums the situation up pretty well. There are only painful outcomes for the quagmire AA finds itself in.

Originally Posted by Finessed (Post 3177866)

I’ve been saying this for over a month

Originally Posted by chrisreedrules (Post 3177868)

I’ve been saying this since this all began

Originally Posted by LabDad06 (Post 3177914)

Well if AA goes chapter 11 or 7 and over 10,000 pilots are potentially out of jobs, at least y'all (and others here who have been nothing but doom and gloom about AA) can pat yourselves on the back, feeling good about yourselves, and boasting about how right you were and toast to it over beers.

Originally Posted by LabDad06 (Post 3177914)

Well if AA goes chapter 11 or 7 and over 10,000 pilots are potentially out of jobs, at least y'all (and others here who have been nothing but doom and gloom about AA) can pat yourselves on the back, feeling good about yourselves, and boasting about how right you were and toast to it over beers.

Originally Posted by Excargodog (Post 3177934)

This isn’t about egos, this is about reality. Not even saying AA management did anything wrong, they can scarcely expect to be able to anticipate a once in a century pandemic event. They aren’t prescient and it isn’t their field and if the assumption EVERYBODY was making about domestic and international flying had come true the money spent on fleet renewal would have been a wise investment. Nobody’s rejoicing at the prospect of AA being downsized, pilots furloughed, or a bankruptcy occurring. But the biological black swan event did occur.

If a truthful analysis of current AA prospects causes uninformed people to have a better understanding of what is going on and to be able to hedge their bets or seek the best option to provide and care for their family, what’s your b|tch?

Sounds like you just want to shoot the messengers. They didn’t cause the problem, they are just spreading the message.

Originally Posted by UncreativeUser (Post 3177935)

It’s the constant fear mongering. Any stats or opinions given out right now don’t mean anything, you know it and I know it. I honestly enjoyed your take and others take over the months but now it’s getting old. We deal with it enough about the elections and the virus itself.

To make any speculation right now is hairless. I’m not psychoanalzing you or mean disrespect but we already have a few guys on these threads that are so negative and often wrong on their predictions. While fun the opinions may be, right now it’s minuscule, so be prepared for more negative comments on your speculations. The facts and numbers you mention could change overnight wether for bad or good


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