Local 512 Message

[TWU informer]

I think Mr. Owens has it exactly right!

The rich get richer and the poor get poorer.

I understand exaclty what he means by his postings.

 

[Nor'Easta]

According to the APFA, Tommie Hutto-Blake has stated that she will not engage in ealry openers with AA.

 

[Bob Owens]

That $4 billion probably "costs" AA a percent or two per year (the spread between its loan rates and its overnight repo/money market account rates on its cash).

"Probably" , in other words you are making an assumption.

If it was so easy to make money in overnight repo/money market accounts then why wouldnt the banks simply put their money there too? Why would they instead offer much lower rates to high risk entities like an unprofitable airline that already has $20 billion in debt?

j7915, once again, you are way out in space. Who is Spanky?

 

[FWAAA]

"Probably" , in other words you are making an assumption.

If it was so easy to make money in overnight repo/money market accounts then why wouldnt the banks simply put their money there too? Why would they instead offer much lower rates to high risk entities like an unprofitable airline that already has $20 billion in debt?

You and AMFA_RV4_Decision2525 are the best salesmen the TWU could ever ask for.

I don't know the exact interest rate spread between AA's cash and its loans, but AA's interest payments and interest earnings provide a pretty good clue:

In the first quarter, AA paid $261 million in interest expense on its total debt (like $20 billion or so) and earned $53 million of interest on its cash of about $4.8 billion. Doesn't even take an A&P license to see the proportionality in those numbers.

Every time you say something stupid like "AA is set to make a profit, despite fuel prices, sitting on billions of cash that they have to pay hundreds of millions of dollars a year in intrest on, keeping scores of underutilized aircraft and ambitious costly capital improvment projects" the TWU ought to send you a check, as it helps ensure the TWU keeps swimming in dues courtesy of your co-workers.

 

[Bob Owens]

You and AMFA_RV4_Decision2525 are the best salesmen the TWU could ever ask for.

I don't know the exact interest rate spread between AA's cash and its loans, but AA's interest payments and interest earnings provide a pretty good clue:

In the first quarter, AA paid $261 million in interest expense on its total debt (like $20 billion or so) and earned $53 million of interest on its cash of about $4.8 billion. Doesn't even take an A&P license to see the proportionality in those numbers.

Every time you say something stupid like "AA is set to make a profit, despite fuel prices, sitting on billions of cash that they have to pay hundreds of millions of dollars a year in intrest on, keeping scores of underutilized aircraft and ambitious costly capital improvment projects" the TWU ought to send you a check, as it helps ensure the TWU keeps swimming in dues courtesy of your co-workers.

There you go again, when you cant dispute what is written you attack the author.

Once again you are making big assumptions. Even you would have to admit that some of that $20 billion in debt is old debt that was taken on when interest rates were at record lows and AMR was making record profits, so your proportionality arguement does not stand.

So sure AA could have earned $53 million on the $4 billion but it still could have cost them a hundred million to do it. So they still lost millions sitting on additional debt. Its like the difference between paying off high intrest credit card debt vs paying off a low intrest mortgage.

Since we know that this management is untrustworthy we have to paraphase former President Clinton, "It depends on what the definition of "debt" is".

If $20 billion in debt means total liability then we would have to include things like AAdvantage miles in that $20 billion figure, and AAdvantage miles can actually diminish in value(if the price of tickets go down), and many of them will actually never be cashed in. So if AAdvantage miles are included in the figure it once again blows your proportionality arguement out the window because that debt would not generate any interest payments. So it would be a prt of the $20 billion figure but not a part of the interest equation.

Like I've said before, I dont doubt the intellectual ability of you guys to blast out the blarney in an attempt to baffle us with bull####, but after all the smoke is cleared away things still have to add up, and they dont.

 

[TWU informer]

According to the "CRIB NOTES" from Tulsa, which is the joint leadership initiative weekly newspaper.

Volume 1
Issue 40
November 22, 2005

AA is in a "death spiral" and is paying $900 million per year to service the $20 billion in debt.

http://me.aa.com/tul/WorkingTogether/CribN...s40_05.1122.pdf