American looking to "right-size" the company and staffing levels for the Fall and 2021

[La Li Lu Le Lo]

Daddy must have money and you are working for fun.

Cut the guy a break.

Fear is making him delusional. He can't accept the severity of the situation. I am not saying AA will go bankrupt mind you. I am saying they are in a very vulnerable state right now.

 

[V.O. Reason]

I’m not deluding myself in saying it’s not bad, of course it is.
As far as Delta and others say no layoffs, well I guess we will see when the fall traffic remains low and their bottom line continues to get worse.
And I’m curious if WN is in such wonderful shape why is their CEO out in the public supporting an extension of the CARES act.
You would think if there in such a good place he would say we are good don’t need the help

 

[La Li Lu Le Lo]

Ever think of the repercussions if 1 of the big 4 failed? What a dire state the country would be in? Boeing wouldn't get an order for ten years

It would not matter. The other 3 would simply absorb the fallen airlines assets and it would be business as usual just as it has been with every other airline bankruptcy or merger.

I really don't understand why you think it would be DIRE when noone is flying anyway? We have too much airline and not enough passengers right now. You really think losing one right now would matter to the general public who is not flying anyway? NOPE!!!

To say AA is in no worse shape than any other airline is telling me you are wearing blinders or just not willing to admit it so denying it to get thru.

The guy is just trying to cope.

Supposedly, AA sends out triple the amount of letters than actually needed to account for various scenarios. This all according to Dale Danker TWU 514

Well no.... they use computer modeling to see who could potentially be affected. The key word there is POTENTIALLY. However that potential is NEVER 100 percent realized. Even if you are in the middle of the list that is no guarantee you are going to get hit. Been through that sh*t show too many times.

 

[La Li Lu Le Lo]

I’m not deluding myself in saying it’s not bad, of course it is.
As far as Delta and others say no layoffs, well I guess we will see when the fall traffic remains low and their bottom line continues to get worse.
And I’m curious if WN is in such wonderful shape why is their CEO out in the public supporting an extension of the CARES act.
You would think if there in such a good place he would say we are good don’t need the help

What the hell are you talking about?

Of course you are deluding yourself.

You stated that American Airlines is in no worse shape than any other airline. You are turning a blind eye to the fact they have been financially damaged due to prolonged aircraft grounding, the fact they have a high debt load, and the fact they ran themselves low on cash doing stock buy backs. Your statement is totally oblivious to those facts. All the fuel savings in the world from those nice shiny new airplanes means dick if they are sitting on the ground soaking up sun.

I am not saying they are going to go bankrupt but dammit V.O.R. tune into Reality FM would you?

 

[La Li Lu Le Lo]

The most likely scenario to happen is that they just screw it up.......like they've always done.

Call it a beta test.

 

[V.O. Reason]

What the hell are you talking about?

Of course you are deluding yourself.

You stated that American Airlines is in no worse shape than any other airline. You are turning a blind eye to the fact they have been financially damaged due to prolonged aircraft grounding, the fact they have a high debt load, and the fact they ran themselves low on cash doing stock buy backs. Your statement is totally oblivious to those facts. All the fuel savings in the world from those nice shiny new airplanes means dick if they are sitting on the ground soaking up sun.

I am not saying they are going to go bankrupt but dammit V.O.R. tune into Reality FM would you?

Debt load is only a part of this equation,
Just about every company airline or not carries debt, the real issue is how much cash is on hand.
Which prior to the virus AA had plenty of cash on hand.
Now nobody has cash because of this mess, so that should mean all the airlines are in trouble.
That is what these government loans were all about to put cash in the airlines pocket.
Nobody is going to generate any cash I don’t think for at least a year or more.
So yes the downsizing is very important and that’s why I’m on the fence about an extension of the payroll help when the truth is AA needs to cut headcount

 

[CremaDiLimone]

So, How are outside investors looking at AA?....... Interesting article. Your thoughts?
Bankruptcy Risks Mount for Embattled American Airlines
https://investorplace.com/2020/07/a...AgXuHXCxvh4UbvK8xlcCrtmmgtyBKwMvHUORQtYng0JtM

when i read this as his top piece of evidence of aa's doom:

However, the average daily cash burn rate in Q2 was $55 million, the highest among its peer group. Delta Air Lines (NYSE:DAL) has brought down its cash burn to $27 million in June; United Airlines (NASDAQ:UAL) is burning $25 million per day as per its latest quarterly reports.

...then i know the author is very disingenuous.

take time to listen to the earnings calls.

 

[CremaDiLimone]

It would not matter. The other 3 would simply absorb the fallen airlines assets and it would be business as usual just as it has been with every other airline bankruptcy or merger.

right. you keep saying that aa has planes parked in the desert..so, ua, southwest and delta have full planes flying around the nation and world?

delta, united and southwest are in no position to pick up aa's pieces, if aa goes under. if aa goes under, it would be a matter of days before everyone else did, because of the advantage a business has in chapter 11 over it's competitors. aa learned that in the 2000s.

this is not 1991 (i had this debate with someone else) where aa and dl were making money for years and were able to pick up eastern's and pan am's scraps to get even stronger.

no one is making money today. the airlines and govt realized months ago the danger for the entire american airline industry.

that article, the author compared aa's april-may-june cash burn rate with dl's and ua's june cash burn rate.

 

[La Li Lu Le Lo]

right. you keep saying that aa has planes parked in the desert..so, ua, southwest and delta have full planes flying around the nation and world?

delta, united and southwest are in no position to pick up aa's pieces, if aa goes under. if aa goes under, it would be a matter of days before everyone else did, because of the advantage a business has in chapter 11 over it's competitors. aa learned that in the 2000s.

this is not 1991 (i had this debate with someone else) where aa and dl were making money for years and were able to pick up eastern's and pan am's scraps to get even stronger.

no one is making money today. the airlines and govt realized months ago the danger for the entire american airline industry.

that article, the author compared aa's april cash burn rate with dl's and ua's june cash burn rate.

AA debt.... higher than it's competitors

AA cost.... high due to new aircraft purchases and higher headcount than competitors.

AA revenue.... low.

Cash on hand..... well that is the wildcard isn't it. At least for me. I suspect AA has far less cash on hand than competitors due to aggressive stock buy backs.

As far as planes in the desert... that is usually a term for retired aircraft so I am going to clarify that the grounded aircraft I am talking about is the 737 MAX (I assume you already knew that but I wanted to make sure) which has damaged AA's bottom line over a long period of time.

I believe AA can pull out of this but in my opinion they need to cut deeper than they have announced and cut services to low yield destinations. I don't know if they can legally do that or not but if they can they damn sure need to. Some destinations are simply not worth the fuel and maintenance cost. Not to mention the labor cost (who if it is a small yield destination are most likely contractors anyway so F em).

 

[CremaDiLimone]

the debt is a fact. more debt than any other legacy carrier.

the fact of the matter is, ua and delta also have debt. they are not generating revenues to get their debt in line during this time, just as aa isn't.

with no revenues, never mind the debt - no airline is generating revenue to pay day to day expenses. this is why the govt. and airlines acted quickly to get the cares act through.

aa did buy back stock. more so than any other legacy carrier. the fact is, aa had more cash on hand at the beginning of this covid era than any other legacy carrier.

you can't expect corporations to generate $20 billion in profits, not share that $20 billion with shareholders/employees and then keep $20 billion in cash on hand for some unforseen catastrophic event. especially an airline..an industry that has always had low profit margins.

corporations give their cash back to shareholders. aa did so during the oil/jet fuel windfall time of 2015-2017, not really through dividends, but through buy-backs.

 

[Real tired]

"So I counted 57 AMT's per page with 34 pages. This equates to 1938 AMT's on this warn list. Does this mean that all will be affected one way or another? Or is it an overcasted list? I hope not all on this list is getting layoff or rifs. What a punch in the gut"

Supposedly, AA sends out triple the amount of letters than actually needed to account for various scenarios. This all according to Dale Danker TWU 514

1938? I think that's just the starting point.

The contract says the company can go down to 2600 TOTAL base maintenance in all departments, plus do line work and it doesn't count against the 50%.

Anybody ever read the section in the contract about "situations beyond the companies control"?

What about Force Majeure? I already lived that one.

These companies can do what ever they want in these times. Our contract be damned. I don't think the company is too afraid of the big, powerful "Association" and the back stabbing, IGM members it contains.

Plus, I don't see many senior people taking the buyout after the list came out, so the numbers may swell from 1938.

 

[Kev3188]

If ever there was a Force Majeure event, this is it. Don’t be surprised to see that invoked all over the place come 10/1...

 

[BigTex]

1938? I think that's just the starting point.

The contract says the company can go down to 2600 TOTAL base maintenance in all departments, plus do line work and it doesn't count against the 50%.

Anybody ever read the section in the contract about "situations beyond the companies control"?

What about Force Majeure? I already lived that one.

These companies can do what ever they want in these times. Our contract be damned. I don't think the company is too afraid of the big, powerful "Association" and the back stabbing, IGM members it contains.

Plus, I don't see many senior people taking the buyout after the list came out, so the numbers may swell from 1938.

I am sure AA will do as they please with impunity. No doubt about that. Southwest got %27 of the workforce to bite...Delta %20. We will see how one month of offering early outs/leaves does for AA. Predictions?

 

[dfw gen]

I am sure AA will do as they please with impunity. No doubt about that. Southwest got %27 of the workforce to bite...Delta %20. We will see how one month of offering early outs/leaves does for AA. Predictions?

Wonder why they keep extending the deadline. The official line is that they want to see if they get anymore free money from uncle Sam. On the other hand they are trying to sell it hard, wonder if there aren't as many takers as they hoped.
Problem is this management team has no creabilty with its employees....

 

[Real tired]

I am sure AA will do as they please with impunity. No doubt about that. Southwest got %27 of the workforce to bite...Delta %20. We will see how one month of offering early outs/leaves does for AA. Predictions?

Predictions? In senior PIT, not many.

Why take an early out when you're only 70?