Is bankruptcy the only way out for AA?

[BeenThere]

Concessions and pay cuts coming soon at AA

 

[NewHampshire Black Bears]

WingNAPrayer,
While I wholeheartedly agree that AA needs/will go on a substantial version of the slim fast plan to downsize(shrink) , to get into safe waters(to start making money),
allow me to be(I think), the first individual, on this board, to state: that AA WILL NEVER SEE THE INSIDE OF A BK COURTROOM, NEVER !!!!!!!!!!
(And that includes no matter what UA does) !!

Now, you have 2 choices.
Go on record, and JOIN ME, or go on record and tell me I'M WRONG.

What's your pleasure ????????

I'll give you an (almost) daily update, starting right now, TODAY !

Are you ready ??

Day # 1, AA is NOT in BK court

NH/BB's

 

[grndproxwarning]

Never say never,it could come back and bite you in the you know what.....
From what I have seen of AMR.bk would be to good for them..
I am talking about the upper crust in HDQ not the front line
emps...I would like to ask Don just one question...
Where did the Billions and Billions in profits go from 1993-2000..Why didnt they squirrel a little away for a rainy day...Boy would I like to see their portfolios..
Just a thought..

 

[lownslow]

Well, if you measure the amount squirreled away for a rainy day by retained earnings, AMR did have quite a bit squirreled away. $5.95 Billion at the end of 2000, to be exact. That was up from $2.43 billion at the end of 1996, or an increase of $3.52 billion. In that 4 year period, total net profit was $4.1 billion. So according to that, the majority of the profits were squirreled away. The problem is that in 2001 alone, AMR lost about $1.8 billion and went through an equal amount in retained earnings, leaving them with $4.1 billion retained. In the first 6 months of 2002, they lost another $1.7 billion and retained earnings dropped another $1 billion. At that rate, AMR will have burned through all remaining retained earnings in another 18 months from 7/2002, or at the end of 2003.

So while they did effectively squirrel away money, the rate they're going through this cash is far too great to sustain for long. Besides, coming out of the downturn in the early 90s, didn't the entire US airline industry have a negative net worth, as they burned through more in that downturn than they had made over the entire prior history?

 

[NewHampshire Black Bears]

WingNaPrayer;
Allow me to clarify a point or two in my last post to you.

I was looking for one of the most prolific, controversial,opinionated and knowlegeable posters on this AA board.

TAG, Your it.

I seriously hope that you and the moderators, DO NOT see my endeavor as a personal attack, against you. IT'S NOT !

With that said, I'm going to put out, on this public message board, on a weekly basis(not daily as originally planned) an open statement addressed to you, stateing how many weeks WILL pass , that illustrates(IMHO) the fact that AA has NOT seen, or WILL NOT SEE the inside of a BK court room.

Obviously I will publish a (not so humble) retraction if I'm wrong. I WONT BE !!!!!!!!!!!

Please feel free to join me, if you are so inclinded.

(And by all means) continue to oppose my view, if that is your stance,
OR,
Completely ignore my post, if that is your desire.
It's a free world.
Your choice !!!!!!!!!

However, I stand (firmly) on my original statement:,
AA has NEVER, and WILL NEVER see the inside of a BK court room !!!!!!!!!!!!!!!!!!!!!!!!!!!

The closest AA will get to BK, is at the drive-up window, for a flame broiled whopper !!!!!!!!!!!


Regards,
NH/BB's

ps.
I've got a prediction on the impending war (or the absence of one), with Iraq. But that's a discussion, for a later time.

 

[MileHighGuy]

[P]Carty will declare bankruptcy if United does. It's as simple as that. A greatly reduced cost structure for UA will not be ignored by Carty. Other than all of the unionized and nonunionized employees taking a substantial pay cut of say 30%-35% (don't hold your breath waiting for the employees to agree), AA will have to declare bankruptcy in order to compete with UA.[/P]
[P]BTW, even with such a pay cut; Carty will still have to increase RJ usage, reduce benefits and increase productivity among all employees. Finally, even more layoffs will be inevitable. Most hard hit will be res agents, since internet bookings are going up substantially. Increased internet bookings will result in less res agents being needed over time. [/P]
[P]So I predict that AA will declare bankruptcy almost immediately after UA does. It's simple economics. If UA does not declare bankruptcy (which I think is very unlikely unless some billionaire wants a shot at running an airline), AA will not declare bankruptcy.[/P]
[P]If AA and UA refuse going into bankruptcy, you can expect another round of crying for a hand out from Uncle Sam. Though I think this time that Congress and the Senate will be more skeptical before dishing out tax payer dollars as if it were Monopoly money.[/P]

 

[BeenThere]

Sure, AA wants to run the company and not let a BK judge do it for them. But I find it hard to believe that they can do it without hitting us up for concessions and givebacks.

 

[AirplaneFan]

[P]
[BLOCKQUOTE][BR]----------------[BR]On 10/21/2002 4:37:34 PM FA Mikey wrote:
[P]airplanefan says:[BR]1)  AA has 2.8B in cash (I'll take your word for it, since it seems the pilot must call the bank every morning to find out).  But how much debt do they HAVE?  They have an underfunded pension fund of over $3B.  They reported a loss of over $900M in 3Q.  One can declare bankruptcy with cash in the bank if the liabilities exceed assets.  But you guys keep stating a bank balance as if inocculates you from the very troubling news.[BR][BR][BR][BR]Mike says: [BR]From AA press release:    It's really an accounting issue. Our pension fund is fine, said Al Becker. We are well within all the minimum funding requirements for the pension fund.[BR][BR]  The minimum pension liability is simply a reflection of the current conditions in the economy, the fact that markets are down, Becker said. It's an issue most companies will have to address.[BR][BR]Becker AMR has contributed $250 million to its pension funds this year and could pay the minimum liability out of cash -- company officials say they have $2.8 billion in cash and short-term investments.[BR][BR]No one says they can not declare bankruptcy. Point is, AA does not want to. They will run the compnay. Not leave it up to a judge.[BR][BR][BR][FONT color=#6666cc]The way I read the statement is that AA can make the minimum payment on its credit card. But there is a $3B shortfall in the pension fund. The reason is that AA quit making payments in the 90's after the pension fund was fully funded and let the stock market lift carry all its pension obligations. Then the market dropped 25% and AA (and the other majors) lack of funding became apparent. While half of the S&P 500 companies have a pension shortfall, the airlines are uniquely affected. Part of that is poor management, the other part because the industry is heavily unionized and labor intensive.[/FONT][BR][/P][/BLOCKQUOTE]

 

[FA Mikey]

airplanefan. Did you belive AA puts in to a pension fund dollar to dollar to cover costs and payments. Money is put in to a fund and use's investments to add monies for the fund. Like the way insuance business makes there money.

Dont judge us by this single point. There are others far worse in this matter.

 

[FA Mikey]

Why not? We will soon see the benefits of the changes we have been making. Removing weight from planes, removing products we dont need or use. We will have new streamlined procedures. Soon airplanes with new configurations. Nothing changes over night. AA has done far more than all the rest in assuring its survival and eliminating waste.

Be a pessimist, be a optimist. You have a choice. Find ways to safe more money and let corporate know. Or just simply write a check every pay period and send to D.C. in care of saving AA.

 

[FA Mikey]

[blockquote]
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On 10/23/2002 709 AM MileHighGuy wrote:


Carty will declare bankruptcy if United does. It's as simple as that. A greatly reduced cost structure for UA will not be ignored by Carty. Other than all of the unionized and nonunionized employees taking a substantial pay cut of say 30%-35% (don't hold your breath waiting for the employees to agree), AA will have to declare bankruptcy in order to compete with UA.[/P]


BTW, even with such a pay cut; Carty will still have to increase RJ usage, reduce benefits and increase productivity among all employees. Finally, even more layoffs will be inevitable. Most hard hit will be res agents, since internet bookings are going up substantially. Increased internet bookings will result in less res agents being needed over time. [/P]


So I predict that AA will declare bankruptcy almost immediately after UA does. It's simple economics. If UA does not declare bankruptcy (which I think is very unlikely unless some billionaire wants a shot at running an airline), AA will not declare bankruptcy.[/P]


If AA and UA refuse going into bankruptcy, you can expect another round of crying for a hand out from Uncle Sam. Though I think this time that Congress and the Senate will be more skeptical before dishing out tax payer dollars as if it were Monopoly money.[/P]
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[/blockquotet]


Please since you have nothing but your own simple speculation. Your overall hate for this company. This post is laughable.

Since when did congress think twice about dishing out tax payers dollars for what ever suited there need at the time.

Lets see if UAL pilots The most expensive employee group, takes a 30% pay cut. They will be making what a typical AA pilot makes. UAL in BK puts them on a field equal to AA. Not better. Maybe UAL can reduce lease payments on there many hundreds of leased planes. AA cant do quite as much since we own out right so many more of our planes than United.

AA jumped through hoops to close this TW thing. They are not about to move the Ft Worth HDQ to a Judges chamber. Having every expence second guessed by lawers from every involved party.

 

[AAquila]

Hey Squeeze,

None of the former LLCers are in anyway happy to be working in a house of pain again. We were abused by Uncle Carl, mismanaged, and let down by the unions. I believe what AA does have in every former LLCer is a formerly jaded employee, now reformed and hoping the best for our new family. The economic crisis that envelopes the entire airline industry and American Air in particular is not Carty's doing. It is however your obligation to speak to your local politician and let them know on what end of the soup line you'll stand when the entire industry goes under. The Government must yield their ever growing control over this industry. We were the most regulated industry prior to 9/11 and that increases with every day. Until then passengers and investors will seek other avenues.

 

[Bob Owens]

lownslow;
I still think that the losses of 92 were overstated. Just as companies can move numbers around to make them look more profitable than they really are to inflate the price of their stock they can also do the opposite to help win long term concessionary agreements.

 

[MileHighGuy]

[P]
[BLOCKQUOTE][BR]----------------[BR]On 10/23/2002 11:57:56 AM FA Mikey wrote:
[P]
[BLOCKQUOTE][BR] Since when did congress think twice about dishing out tax payers dollars for what ever suited there need at the time.[BR][BR]
[P] [/P]
[P]Ever since they had a [STRONG]huge[/STRONG] deficit thanks to Bush economics (read tax cuts) and billions on military spending/defense since Sep. 11.[/P]
[P]Where have you been lately? Mars? [/P][/BLOCKQUOTE][/BLOCKQUOTE]

 

[will fix for food]

[blockquote]
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On 10/23/2002 709 AM MileHighGuy wrote:



......Carty will still have to increase RJ usage, .......



Pending APA approval.........
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[/blockquote]