I am, however, aware that AA paid out about $2 billion in interest expense on that debt in both 2023 and 2024, and will come very near that this year based on the first three quarters. We’ll know for sure when they announce their fourth quarter financials.

alt=""https://i.ibb.co/DgvFv5yG/IMG-7884.jpg

And that because of their far lower profits and higher debt and debt to equity ratio they are paying higher interest than their legacy competitors. If you hope to convince me that’s a GOOD thing, you are certainly free to try, but I gotta warn you - you got your work cut out for you.

alt=""https://i.ibb.co/nMfxx4vj/IMG-7886.jpg

alt=""https://i.ibb.co/k2g8SVV5/IMG-7887.jpg

Thanks for saying what we were all thinking :rolleyes:

AA's financials are not in three-alarm fire territory by any means.

But objectively they are not in as good a position as other legacies, and they might be in a tight spot in the face of a significant economic/industry downturn (they'd just need to tap some crisis financing, which would be available). In a black swan situation, they'd be the first to go (absent CARES style bailout).

If things keep chugging along, they'll be fine. They're also too big to fail, absolute worst that could happen would be Ch.11, furloughs and CBA haircuts... nothing really new in this industry.

Indeed. They are too big to fail, but not too big to go bankrupt if things got bad enough. Strangely enough, they were sort of the unicorn in their last bankruptcy, in that even their stockholders didn’t lose ALL of their money.

That was an era when BK was allowed as a matter of bookkeeping convenience, vice last-ditch survival option. So the court probably didn't see the equity in wiping out common shareholders if the company was only moderately distressed.

But laws have changed since, you need to be in really bad shape for the court to even entertain a BK plea now. That's for corporate, as far as I know individuals can still load up the lifestyle on credit cards and then just tap out at any time, no questions asked.

Spirit's two trips to bankruptcy seems to undermine your corporate argument and the 2005 BAPCPA legislation made it more difficult, expensive, and less financially advantageous for consumer debtors to file for bankruptcy, particularly Chapter 7 liquidation.

My argument was that you need to be in financial dire straits. They were. Might there have been shenanigans along the way? Of course, but as long as you're actually broke you can still file.

Also in the case of airlines, you can't cut it quite as close as in other industries, since the FAA will start looking hard at your operating authority if you're near insolvent (safety). The court will recognize this fact and allow for it.

As I said, "as far as I know". My interest in that realm is limited to corporate law and business. Don't follow personal stuff. Glad to hear they made it harder, at the very least they should garnish the crap out of your wages if dig yourself a hole with lifestyle (more sympathy for medical debt, health-induced job loss, etc).

AMR bankruptcy was well after the new legislation. Possibly to help facilitate the merger with usair? Also possible the new legislation helped shareholders obtain (provided some leverage) new stock in the combined company?

OK, if it was under the new laws then different rules.

Pretty sure that wasn't the case at F9 when they filed.

Pretty sure they did it after the law changes.

And YES, we ALL NOW, it was a strategic move...........