Aircraft Retirements

[La Li Lu Le Lo]

Maybe just maybe AA owing $24B is a good thing. AA paying that back is a steady cash stream for lenders when airline travel bounces back. If AA goes under that’s $24B the lenders never fully recover. I believe most of our planes are leased and gates are rented. Looks like there will be a lot of planes and gates available for the immediate future.

what will happen with MAX will be interesting.

maybe i'm naive..but, if the govt. is willingly on the hook for aa's $12 billion in grants and loans and then allows it to go belly-up by cutting off the $$...

the media that complains knows the routine. if the govt. says they won't allow an industry to collapse, then it won't collapse.

you're comparing 1991 to 2020? comparing apples to oranges for your historical model?

i know you run the airline industry, but the secretary of the treasury publicly stated that the airline industry will not collapse. he said it's a national security issue and you say 1991 midway and pan am. ok.

how do you change trump's mind? with examples of 1991 midway, eastern and pan am? at the time, i believe there were enough seats from other airlines to pick up the slack. that is not the issue today.

you call anyone who disagrees with you 'skippy'. what would trump and mnuchin call you for your 1991 midway model?

trump and govt. don't want the airlines to fail. the democrats will pick up their dusty union card and also point to the high number of urban airline employees/perceived dem voters and they don't want to the airlines to fail (with conditions for highly paid execs and stock buybacks).

your october scenario of the airline doomsday clock striking 12 is right before elections and yes, maybe you're right. politicians up for election 30 days later will pull the plug on a few hundred thousand jobs.

looks like you'll need to move heaven and earth to have washington walk away from the airlines. something that you seem to want to happen.

The government may not allow the "airlines" to fail but that does not translate to "American Airlines". They are certainly going to prioritize and American Airlines having such a huge debt load probably does not bode well.

The truth is it does not really matter to the general public if an airline goes out of business, not even a major, because there is always going to be another company/companies all too ready to gobble up assets and take over that market share.

You guys always seem to forget it is the market that drives business and right now.... there isn't one.

I hate to be so negative. Seeing American Airlines cease operations would be very catastrophic for me. It would affect my pension, my wife would lose her job, and it would decimate the city of Tulsa, my home, economically. That is truly the last thing I want to see but I know it is a possibility.

To tell you the truth I am very concerned.

American Airlines leadership has had a lot of missteps. Purchasing TWA was a mistake, merging with US Airways was a mistake, making the largest aircraft order in history was a mistake, and buying back stock instead of paying down debts was a mistake.

 

[swamt]

Not everyone has the self discipline or atmosphere to work from home.

That being said I have worked from home for years with no issues. I do hope that companies become more open to it but we shall see. Honestly I think it is a win for everyone. I save money in fuel and parking cost. I gain the commute time back as personal time.

The company has to pay for less office space, less furniture, and less utility usage.

And a lot of people don't have the means or is even able to work from home. Aircraft mechanics. How would they work at home? Pilots? F/A's? Any office worker, IT, CS etc... All have the means to work from home easily, others do not.
I think companies will get more used to it. This is the big move they needed to try something like "work from home" and see how it works. Just think of the savings within a co. if they could eliminate office leases or purchases and maintenance, the cost are huge. And there are so many more cost factors related to employees working from home for both the company as well as the employees.
A study has shown just recently that work from home gets approx 2-3 more hours out of the employee rather than commuting to an office, commuting home etc.. I think we will see a pretty large move towards working at/from home in the future.

 

[jimntx]

In the context of everything else, that $12B is nothing.

Less than half a million people work in the airline industry, and unlike banking and auto/medical/pharma manufacturing, those jobs can’t be exported.

Go back to 1991/1992 for your history lesson this time, not 2001. Pan Am and Eastern died, along with Midway 1.0 and some smaller carriers, and it didn’t hurt tourism or business traffic.

The next six months are going to prove which airlines are able to adapt to new normal, and have employees willing to help their companies survive. Some of them are already ready for this, others aren’t, and then there’s the “full pay to the last day” crowd which still permeates AA.

When October comes, don’t be surprised if what was a unified airline industry suddenly fractures into a faction of survivors lobbying against continued subsidies and another who still needs life support.
?
That split will give Congress cover to pull the plug on further support.

(Hit click to expand quoted post for my post to make sense.)
If you don't think such an argument will not break out, follow the current Virgin Australia/Qantas spat. Qantas, which is in pretty good financial shape has refused government help and is protesting any help for Virgin Australia. If Delta, United, and SWA could make AA disappear by just refusing government money, don't you think they would?

Cynical? Moi? How could you say such a thing?
LOL

 

[1AA]

And a lot of people don't have the means or is even able to work from home. Aircraft mechanics. How would they work at home? Pilots? F/A's? Any office worker, IT, CS etc... All have the means to work from home easily, others do not.
I think companies will get more used to it. This is the big move they needed to try something like "work from home" and see how it works. Just think of the savings within a co. if they could eliminate office leases or purchases and maintenance, the cost are huge. And there are so many more cost factors related to employees working from home for both the company as well as the employees.
A study has shown just recently that work from home gets approx 2-3 more hours out of the employee rather than commuting to an office, commuting home etc.. I think we will see a pretty large move towards working at/from home in the future.

 

[V.O. Reason]

No question the airlines will have to adapt to a new an different way to do business
I feel so far American has recognized that summer international travel is going to be weak and have already adjusted the schedule accordingly.
Most don’t see air travel to fully return pre virus for 18 to 24 months so yes this is going to be difficult time and yes job losses are coming but total failure isn’t likely with the exception of one or two smaller airlines in my opinion

 

[eolesen]

how do you change trump's mind? with examples of 1991 midway, eastern and pan am? at the time, i believe there were enough seats from other airlines to pick up the slack. that is not the issue today.

Really? If AA shut its doors tomorrow, you really believe that WN, DL, and UA don't have the capacity to soak up everything from AA?

Load factors across the board are in the 20% or lower. We could lose two airlines and still have excess capacity.

If the "experts" are right that travel looks to be down across the board ~30% for the next couple years, there's no way every company can reduce revenue and costs by 30%. There **will** be airline casualties.

 

[CremaDiLimone]

Really? If AA shut its doors tomorrow

but, it's not about tomorrow. no moving the goal posts. my post was in regard to what you said here:

When October comes, don’t be surprised if what was a unified airline industry suddenly fractures into a faction of survivors lobbying against continued subsidies and another who still needs life support.

That split will give Congress cover to pull the plug on further support.

the govt. has seen that commercial and cargo airlines will make it through to october. tomorrow or next week isn't the issue.

it was about after october. after the govt. has invested $50 billion in this operation, after the govt. has clearly stated they won't allow the airlines to collapse..my argument is that the govt. won't allow the industry to collapse.

to me, 'industry' and legacy 3 are mutually inclusive.

 

[CremaDiLimone]

The government may not allow the "airlines" to fail but that does not translate to "American Airlines". They are certainly going to prioritize and American Airlines having such a huge debt load probably does not bode well.

did the govt. look at debt levels prior to the cares act, or stimulus #3? no. all they did was ask the airlines for 2019 labor expenses (no profit sharing/bonuses).

one day, delta will need to buy planes too...should the govt. weigh and measure that?

you're entitled to your opinion just as much as i am. my opinion is based on what has happened (govt. $$ for airlines) and what has been stated by the president, the vice-president and the secretary of the treasury (we will not allow the airline industry to collapse, more stimulus package(s) will likely come).

when they say industry, my thinking is that the legacy 3 make up much of the industry.

 

[La Li Lu Le Lo]

View attachment 15193

Funny.

There is a company making simulators for semi trucks using off the shelf components (in fact they use the same pedals and wheel I do for online racing). Basically an autonomous system drives most of the route then they "log in" during the "last mile" and drive the semi using a wireless connection (not sure if they are using satellite or cellular) for the more complicated docking procedure. In this way they can have one driver handle several trucks a day. They can work in comfort in an office and be home every night with their families.

In a day of autonomy and drones maybe one day when technology progresses enough flights can be done remotely to.

You never know what the future will bring.

 

[robbedagain]

Really? If AA shut its doors tomorrow, you really believe that WN, DL, and UA don't have the capacity to soak up everything from AA?

Load factors across the board are in the 20% or lower. We could lose two airlines and still have excess capacity.

If the "experts" are right that travel looks to be down across the board ~30% for the next couple years, there's no way every company can reduce revenue and costs by 30%. There **will** be airline casualties.

So far. 3 small regional airline out of business n 1 small bank. DL losing 60 mill a day. UA 100 mill. What is AA losin? Wn? These majors will most likely survive but come out smaller than before.

 

[La Li Lu Le Lo]

when they say industry, my thinking is that the legacy 3 make up much of the industry.

The truth is it does not really matter to the general public if an airline goes out of business, not even a major, because there is always going to be another company/companies all too ready to gobble up assets and take over that market share.

You guys always seem to forget it is the market that drives business and right now.... there isn't one.

Really? If AA shut its doors tomorrow, you really believe that WN, DL, and UA don't have the capacity to soak up everything from AA?

Load factors across the board are in the 20% or lower. We could lose two airlines and still have excess capacity.

If the "experts" are right that travel looks to be down across the board ~30% for the next couple years, there's no way every company can reduce revenue and costs by 30%. There **will** be airline casualties.

CremaDiLimone I hope you are right.

However, strictly from a numbers perspective what you are saying does not make much sense.

There is no need to maintain American Airlines at great expense to the taxpayer when you have other airlines running at such low capacity.

I hope I am wrong.

That being said it would not hurt for people to start working on a plan B just in case the airline goes tits up.

 

[La Li Lu Le Lo]

My guess is American and Southwest will go after Boeing for monetary damages due to the 737 MAX.

 

[1986Mekanic]

This guy predicts a complete shutdown..

https://www.fliegerfaust.com/airline-news---2645648431.html

 

[eolesen]

but, it's not about tomorrow. no moving the goal posts. my post was in regard to what you said here:

the govt. has seen that commercial and cargo airlines will make it through to october. tomorrow or next week isn't the issue.

it was about after october. after the govt. has invested $50 billion in this operation, after the govt. has clearly stated they won't allow the airlines to collapse..my argument is that the govt. won't allow the industry to collapse.

Not moving the goal posts, but don't be led to believe you're fully funded thru October. You're not.

Half the "investment" is in grants, and half is loans. Loans have some terms that may make them less attractive to carriers, and reading between the lines of the terms, if this turns out to be an ATSB style approval process, not every airline will be approved for a loan guarantee..

With that in mind, the only thing certain is the grants... Dividing the $25B or so five ways (one part each to AA/DL/UA/WN and one way to everyone else) seems to be about $5B per large airline in terms of grants. Nobody really knows how much each airline cash is bleeding between refunds for canceled flights, lost bookings, payroll, and fixed costs like aircraft ownership and facility rent.

If you look at what United and Delta said last week -- $100M and $60M per day -- $5B only covers 8 and 12 weeks respectively.

That means the grant cash runs out in June and July respective for those two airlines.

 

[eolesen]

That type of technology will happen, it's just a matter of when. You already have cars with some of the autonomous features (we wound up with an equipped Honda rental a few months ago... quite cool https://automobiles.honda.com/sensing), so this isn't years away.

Basically an autonomous system drives most of the route then they "log in" during the "last mile" and drive the semi using a wireless connection (not sure if they are using satellite or cellular) for the more complicated docking procedure. In this way they can have one driver handle several trucks a day.

There's also a thought of having the over-the-road driving done "drone-style" and having trucks delivered to distribution areas parking area, with a live on-the-ground hostler handling the docking.