Another Bankruptcy?

[Wretched Wrench]

Am I the only one here who thinks AA will try the bankruptcy thing again? Maybe this time for real. This Fall. Or March?

 

[KCFlyer]

No, you''re not alone...and I don''t think they''ll "try", I think they''ll do. But if U or UAL can''t start showing profits after the "busy" summer travel season, then I really think that the courts and creditors will have decided that the Chapter 11 route doesn''t work., and may just refer them to Chapter 7 of that code. That won''t be very good for any AA employees.

 

[AAmech]

We still need more time to see how this current plan pans out. Its a pretty good sign that they''re cash positive already. Apparently many of the changes they''ve implemented really won''t result in savings untill later, so who knows maybe it will work. Weather or not they file BK AA is well on its way to restructuring itself so I doubt they''d Chap 7 us. I think they''d go the extra mile and really change all rules and benifits to mirror a LCC.

 

[jimntx]

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On 7/12/2003 6:17:23 AM KCFlyer wrote:


then I really think that the courts and creditors will have decided that the Chapter 11 route doesn''t work., and may just refer them to Chapter 7 of that code. That won''t be very good for any AA employees.

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While I agree that bankruptcy is an inevitability for AMR (losing $1B/qtr does not bode well for earning enough to pay off $18B in debt), the success or failure of UAL or USAir in bankruptcy will have nothing to do with what happens to AMR.

Bankruptcy court does not depend upon precedent the way other courts do. Each case is decided on its own merits--Is there a viable company under all that debt? Can reorganization make the company a going concern? Can the creditors get a fair shake in the reorganization?

The judge is there to protect the rights of the company from the on-slaught of the creditors committee as much as he is there to see that the company does not screw over the creditors.

All that said, AMR knew months ago that bk was coming. They just wanted to make sure that it was on their terms. So, they went after pay and pay-related benefits with the major unions by threatening bk. The union leadership folded. Now, in bk all the company has to "attack" are the pensions and the "onerous" work rules--particularly, those of the pilots and f/a''s--that prevent the company from making a profit.

Just a thought from a furloughed nAAtive f/a.

 

[acmech]

GOOD!!!! I hope it happens.

After that, the political forces can come in and buy up the assets of TWA and leave the rest of the garbage that is dirty American Airlines to rot on the vine.

 

[FWAAA]

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On 7/12/2003 8:05:30 AM AAmech wrote:


We still need more time to see how this current plan pans out.  Its a pretty good sign that they''re cash positive already.  Apparently many of the changes they''ve implemented really won''t result in savings untill later, so who knows maybe it will work.   Weather or not they file BK AA is well on its way to restructuring itself so I doubt they''d Chap 7 us.  I think they''d go the extra mile and really change all rules and benifits to mirror a LCC.

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The employee concessions equaled 2002''s negative cash flow from operations. With improved revenue, lower fuel prices, rebounding traffic and the other operational savings (the other $2 billion we keep hearing about), AA isn''t filing Ch 11 or Ch 7 anytime soon. AA''s recent cash infusions of over $800 million plus positive cash flow from operations will keep AA bankruptcy-free for the forseeable future.

Of course, there will be many who hate the idea that the concessions will actually do what management said they would (help save the company). They keep thinking that bankruptcy is the magic cure for all of organized labor''s troubles - as if bankruptcy is the land of milk and honey.