AAL DEBT LOAD-Debt to Equity Ratio

[Rusty Hilock]

unless delta gets free airplanes, looks like it put pen to paper on $12 billion for 100 airbuses. will it pay $12 billion? no, but they aren't free.

delta also has to purchase aircraft to replace 30+ year old planes.

Not if a major economic downturn happens in the next 12-18 months due to increased fuel prices and add in increases in labor cost. Just the opposite: Most carriers will be parking planes to reduce capacity which means it is a lot easier to park old aircraft with NO payments than than NEW Aircraft with Lease and/or Loan Payments due.

 

[ALUS78]

Not if a major economic downturn happens in the next 12-18 months due to increased fuel prices and add in increases in labor cost. Just the opposite: Most carriers will be parking planes to reduce capacity which means it is a lot easier to park old aircraft with NO payments than than NEW Aircraft with Lease and/or Loan Payments due.

We have some older ones to park too if the need were to rise there Mr Sunshine.

 

[wings396]

Not if a major economic downturn happens in the next 12-18 months due to increased fuel prices and add in increases in labor cost. Just the opposite: Most carriers will be parking planes to reduce capacity which means it is a lot easier to park old aircraft with NO payments than than NEW Aircraft with Lease and/or Loan Payments due.

I think that you're leaving out an important factor that's linked to the increased fuel costs.
With the industry the way it is today, all of the airlines are disciplined enough to raise fares to keep up with costs. In the past, there were too many seats vs passengers, and everyone was reluctant to raise the price of a ticket to cover rising operating costs in favor of filling a seat. The airlines were just about the only business that didn't pass costs on to the consumer, thus the huge losses over the years.

 

[Rusty Hilock]

I think that you're leaving out an important factor that's linked to the increased fuel costs.
With the industry the way it is today, all of the airlines are disciplined enough to raise fares to keep up with costs. In the past, there too many seats vs passengers, and everyone was reluctant to raise the price of a ticket to cover rising operating costs. The airlines were just about the only business that didn't pass costs on to the consumer, thus the huge losses over the years.

Your premise has some sound principles and makes sense.

My concern is from an old saying : OLD HABITS DIE HARD
The management will revert back to its old ways instinctively when pressured by outside financial forces.

 

[WeAAsles]

We have some older ones to park too if the need were to rise there Mr Sunshine.

April 6, 2017

“The data shows that during the recent oil price spike, fuel costs rose to about 35% of costs. It was during this period that American rapidly started retiring its MD-80s and replacing these with Boeing (NYSE: BA) 737s.

In fact, in 2000 American's average fleet age was 27.9 years compared to 28.5 at Delta and 25.3 at United. By 2016, American's average fleet age was 13.3 years, Delta was 17.6 and United 16.4.

Older aircraft are much like people; the older you are the more healthcare you need. Consequently fleet age is an important metric to watch. Even though these three airlines have world class maintenance facilities, keeping their aircraft flying, older aircraft need more care - meaning expense.”

https://www.google.com/amp/s/seekin...proving-fuel-efficiency-american-delta-united

 

[Rusty Hilock]

We have some older ones to park too if the need were to rise there Mr Sunshine.

You are correct but then that leaves you with newer aircraft that have lease/loan payments due. Delta can more easily borrow operating capital and at a cheaper rate due to AAL 's DEBT to EQUITY Ratio

 

[WeAAsles]

You are correct but then that leaves you with newer aircraft that have lease/loan payments due. Delta can more easily borrow operating capital and at a cheaper rate due to AAL 's DEBT to EQUITY Ratio

March 20, 2017

“By the end of this year, the average age of American's 950-aircraft fleet will be 9.8 years, down from nearly 14 years in 2012. The average fleet age is 10.4 years at Southwest, 14.4 years at United and 16.6 years at Delta.

By the end of 2017, American will have taken delivery of 395 new, more fuel-efficient aircraft since the 2013 merger with US Airways, while retiring 391 old aircraft. That number includes 57 new aircraft this year.

American's capital expenditures, mainly for aircraft, totaled $22.7 billion, while Delta spent $12.3 between 2014 and 2017.

Parker also urged airline investors to think longer term, according to the Wall Street Journal report.”

https://www.google.com/amp/s/www.bi...nes-fleet-modernization-will-help-it.amp.html

 

[Rusty Hilock]

I think I'll put on some ROSE COLORED GLASSES Now.

Wait I see that EVERYTHING is great at AA and we have the best Airline Management team in the world.
I don't see ANY DEBT ISSUES on the Horizon
All AA employee groups have the best Contracts in the Airline Industry.
AA is making Billions and using it to payoff the 25 BILLION DOLLARS IN DEBT Instead of buying back Stock.
No reductions in Force in the AMT and Related workforce and Tulsa will once again Double in work and workforce.
I can't see all the Title I people that are leaving AA TULE every month and Never REPLACED.
I can't see another Another aircraft Dock being disassembled and the Hangar Dock Space converted to Warehouse Space.

I really like these ROSE COLORED GLASSES! I think I'll wear them ALL the Time.

 

[WeAAsles]

American Airlines: I Placed Too Much Importance On High Debt Levels
May 2, 2018 11:49 AM•AAL
Summary

• American Airlines (AAL) carries substantial debt levels due to its fleet overhaul.
• However, this could help the airline mitigate higher fuel costs with more fuel-efficient aircraft.
• Moreover, revenues and passenger numbers continue to rise.
• The current price could prove a good entry point for a long-term investor.

Back in a previous article last July, I made the point that American Airlines (NASDAQ:AAL) is best avoided due to the company's high levels of debt and lack of sufficient growth in net income.

https://www.google.com/amp/s/seekin...lines-placed-much-importance-high-debt-levels

 

[ALUS78]

American Airlines: I Placed Too Much Importance On High Debt Levels
May 2, 2018 11:49 AM•AAL
Summary

• American Airlines (AAL) carries substantial debt levels due to its fleet overhaul.
• However, this could help the airline mitigate higher fuel costs with more fuel-efficient aircraft.
• Moreover, revenues and passenger numbers continue to rise.
• The current price could prove a good entry point for a long-term investor.

Back in a previous article last July, I made the point that American Airlines (NASDAQ:AAL) is best avoided due to the company's high levels of debt and lack of sufficient growth in net income.

https://www.google.com/amp/s/seekin...lines-placed-much-importance-high-debt-levels

Okay Weez time to downsize to a Focus

 

[WeAAsles]

I think I'll put on some ROSE COLORED GLASSES Now.

Wait I see that EVERYTHING is great at AA and we have the best Airline Management team in the world.
I don't see ANY DEBT ISSUES on the Horizon
All AA employee groups have the best Contracts in the Airline Industry.
AA is making Billions and using it to payoff the 25 BILLION DOLLARS IN DEBT Instead of buying back Stock.
No reductions in Force in the AMT and Related workforce and Tulsa will once again Double in work and workforce.
I can't see all the Title I people that are leaving AA TULE every month and Never REPLACED.
I can't see another Another aircraft Dock being disassembled and the Hangar Dock Space converted to Warehouse Space.

I really like these ROSE COLORED GLASSES! I think I'll wear them ALL the Time.

Did anyone in this thread say that AA’s debt should be of no concern whatsoever? Just think you might be a little overfocused on it because of the rising oil price.

The old AMR did a great job of getting all of us to be obsessed about it that’s for sure.

 

[ALUS78]

I think I'll put on some ROSE COLORED GLASSES Now.

Wait I see that EVERYTHING is great at AA and we have the best Airline Management team in the world.
I don't see ANY DEBT ISSUES on the Horizon
All AA employee groups have the best Contracts in the Airline Industry.
AA is making Billions and using it to payoff the 25 BILLION DOLLARS IN DEBT Instead of buying back Stock.
No reductions in Force in the AMT and Related workforce and Tulsa will once again Double in work and workforce.
I can't see all the Title I people that are leaving AA TULE every month and Never REPLACED.
I can't see another Another aircraft Dock being disassembled and the Hangar Dock Space converted to Warehouse Space.

I really like these ROSE COLORED GLASSES! I think I'll wear them ALL the Time.

I hear what you are saying you made good points but Im saying AA is not going out of business until another mode of transportation is invented.That electric Tesla dude wants us to travel in vacuum tubes

 

[bob@las-AA]

The trouble with financial analysis and others like that, is that they have a 50-50 chance of wrong, or if you are a optimist 50-50 chance of being right.

 

[Rusty Hilock]

I hear what you are saying you made good points but Im saying AA is not going out of business until another mode of transportation is invented.That electric Tesla dude wants us to travel in vacuum tubes

Hey, Fender, Mesa Boogie, and Marshall still make brand new vacuum tube guitar amps!
Also some high end boutique guitar tube amps such as DR Z and Bad Cat.

I think you may be talking about a different type of vacuum tube.

 

[ALUS78]

Hey, Fender, Mesa Boogie, and Marshall still make brand new vacuum tube guitar amps!
Also some high end boutique guitar tube amps such as DR Z and Bad Cat.

I think you may be talking about a different type of vacuum tube.

I was looking at a Vox thought it would make me sound better.I was told to make my cheap Frontman sound great first.My Strat has been under my bed for years