The new fAAmily is feuding already!

[WorldTraveler]

Its not the debt itself which is problematic, its debt service which is the most important. If AA doesn't have a problem servicing its debt then it won't be a problem. For the blockbuster deal AA got with Boeing/Airbus (oh yah, courtesy of Tom Horton), they got incredible financing deals.
 
If Parker & Co. can't deliver on their promises, then servicing the debt might become a problem.

Jacob,
Of course the real issue with debt is debt service but the amount of money necessary to service the debt is directly related to the size of the debt and to the income one has that can be used to pay all kinds of bills, of which debt service is just one.
The simple fact is that AMR will have well over $10B in debt even on a standalone basis; US brings another $5B. Both of those numbers are before pension benefits and before all of the debt with new aircraft.
AMR will have more debt that other airlines of comparable size and as a percentage of revenue even compared to smaller airlines.
AMR will have billions of dollars in pension liability that only AMR and DAL carry. DL is accelerating repayment of its pension debt.
You can talk about the cost savings that come from newer aircraft but the simple fact is that if those newer aircraft don’t provide a cost advantage over AA’s peers, then the investment hasn’t really accomplished much.
The industry has traditionally replaced aircraft fairly aggressively – which is why the industry as a group has never covered the cost of capital. Not all airlines buy the theory that new aircraft are necessary and that used or older aircraft can’t do the job at far lower costs. DL and WN both have far lower percentages of fleet expenditure commitments and both also have much healthier balance sheets. They also both have substantially lower costs than AA.
Higher debt will translate into higher debt service. Even if AA can cover the cost of its debt, other carriers will have less; a difference of a couple hundred million dollars per year devoted just to debt service can make a big difference in profitability.
Never before in the airline industry have we had just a divergence in mgmt approaches between AA and UA which are embracing the traditional airline approach of heavy fleet renewals and heavy debt and DL and WN which have a much higher tolerance for older and used aircraft as a means to have lower debt levels.
On this level alone, there will be an increasing divergence between AA and UA on one hand and DL and WN on the other.

So the masses are busy infighting...


Meanwhile the bosses laugh & laugh...

and non-union employees continue to ask why they want anything to do with "that system."

 

[robbedagain]

us employees do not have pensions bec it was terminated  and the iam has its own pension for their members...   as for debt  i thought dl has some high debt    us shed a ton of theirs in ch11   as is what aa has done

 

[Thomas Paine]

Everyone at US knows they filed for a release, it's also been posted numerous times on the board. And yes the IAM has picketed in CLT, PHL, and PHX.

Do we need to start calling you "Iam Overspeed"?  You use the same tactics, you have repeatedly stated that you held pickets in those cities before, and nobody even heard about it. So No, not everyone, in fact hardly anyone knows, have ticket sales dropped? The question was did you picket the NMB (in Washington DC) to show them you are serious? Have you handed out information pamphlets at all stations telling passengers of your request and how if its granted that 30 days from granting the request that you could be on strike and if they are flying at that time their flights could be cancelled? Otherwise how does anyone know whether your request for release was real or if it was like when Don Videtich told the NMB that they want to put it out there to the membership that we were requesting a release but we really don't want to be released? Somehow I get the feeling that your request is just like Videtich's request. going through the motions but not really pushing for it.

 

[Kev3188]

and non-union employees continue to ask why they want anything to do with "that system."

Union vs. union... union vs. non union...

All equally guilty of the circular firing squad.

 

[WorldTraveler]

us employees do not have pensions bec it was terminated  and the iam has its own pension for their members...   as for debt  i thought dl has some high debt    us shed a ton of theirs in ch11   as is what aa has done

yes, UA and US shed their pensions and gave up parts of the reorganized companies to the PBGC.

DL has paid off billions of dollars in debt since emerging from BK. The final debt numbers for AMR as a standalone company aren't known but it is very likely that AMR will have more debt coming out of BK as a standalone company than DL has now... and DL is a larger company. Add in US' debt and there is no doubt that new AA will be much more heavily in debt than DL. It is hard to say how AA will compare with UA but both will have debt ratios far higher than other carriers in the industry.

Also, there is very little debt that is cancelled in BK. Some is converted to equity but most of the debt is just refinanced. Ch 11 is a RESTRUCTURING of debt far more than elimination of it.
 
 

Union vs. union... union vs. non union...

All equally guilty of the circular firing squad.

true but when non-union vs. mgmt. looks very peaceful in comparison - as it does at DL and B6, then the labor movement has a hard time convincing people that they should get into a hostile, contentious environment that doesn't translate into more money.

 

[Kev3188]

No shortage of internal strife at the Widget.

 

[robbedagain]

kev  id imagine that its only going to get worse bro

 

[WorldTraveler]

based on what? 
 
As much as Kev is free to have an opinion about labor relations and hope that there is a chance that further unionization can occur at DL, there is a big difference between multiple active unions fighting between themselves which is what is happening at other carriers and DL where there no unions in the largest employee groups which means there may be groups of employees who are hoping to create division which doesn't exist. 
 
 
DL's labor environment is the most stable among the largest airlines in the US and even the world. 
 
Union infighting that results in no economic benefit to employees at other carriers including provides a powerful disincentive to non-union employees including at DL and B6.

 

[dfw gen]

Go delta! Woo hoo yea team blue!

 

[eolesen]

Who cares if DL or B6 have stable labor relations?  This is the AA forum.

 

[700UW]

I thought this is the Delta Dominates the World message board.

 

[MetalMover]

 
DL's labor environment is the most stable among the largest airlines in the US and even the world. 
 

Of course it is....just try organizing and see how fast they find something to fire you for!

 

[Kev3188]

Already happening...

 

[737823]

Already happening...

Organizers are being disciplined/terminated? I find that very unlikely, CBA or not there are considerable legal protections against retribution of employees for partaking in organizing drives DL isn't stupid, they will comply with the law and remain neutral to the extent required. Again, DL has said repeatedly they respect employees right to choose and they have and will if your co-workers want to become organized. Time and time again they have rejected representation. Get over it, the IAM is gone and NWA no longer exists. The demographics at DL have changed over the three years, considerable RRs have been hired. Potentially 4-5+ RRs could backfill a single staunch pro-IAM ex-NW ramper, and all else equal RRs are less likely to support joining a union.

Josh

 

[Kev3188]

Organizers are being disciplined/terminated? I find that very unlikely

You're free to think what you'd like.

You'll also be wrong.