US Airways Confirms It Has Hired M&A Advisors For Possible AMR Takeover

[FWAAA]

I believe I have read that the US became a net exporter in 2011 after decades.

The US became a net exporter of refined petroleum products in 2011, but remains a net importer of crude:

http://online.wsj.com/article/SB10001424052970203441704577068670488306242.html

http://www.usatoday.com/money/industries/energy/story/2011-12-16/us-oil-boom/52053236/1

 

[jimntx]

The US became a net exporter of refined petroleum products in 2011, but remains a net importer of crude:

It's one of the reasons that so many are opposed to the shale oil pipeline from Canada that is supposed to cross the middle of the U.S. Isn't anyone even vaguely curious about the fact the terminus of the pipeline will be at a Gulf of Mexico port? There are refineries all around where they can fix the shale oil up and ship the refined product overseas.

 

[BoeingBoy]

WN's hedges in recent quarters have not delivered lower all-in fuel prices than other carriers. Their hedges are average.

Not unsurprisingly, you miss the point. If oil went to $150/bbl US, with no hedges, would be in the worst position. Those "average" hedges would look pretty good then...

Jim

 

[BoeingBoy]

There are refineries all around where they can fix the shale oil up and ship the refined product overseas.

Or NY ports, west coast ports, or anywhere. The point being that once at refineries or ports, it enters the world supply and affects world prices. Whether shale oil from Canada or Nebraska, transporting it at much lower cost to where it can be used helps put downward pressure on prices.

Jim

 

[FWAAA]

It's one of the reasons that so many are opposed to the shale oil pipeline from Canada that is supposed to cross the middle of the U.S. Isn't anyone even vaguely curious about the fact the terminus of the pipeline will be at a Gulf of Mexico port? There are refineries all around where they can fix the shale oil up and ship the refined product overseas.

The industry's trade association equates refining with manufacturing:

http://www.usnews.com/opinion/blogs/on-energy/2011/12/21/are-rising-oil-exports-good-for-america

I don't know how labor-intensive refining is, but I'm guessing that it doesn't require all that many employees.

 

[BoeingBoy]

Depends on how you look at it. Total number of refinery employees is pretty high, but even a small refinery produces a lot more units of product (in barrels) than all the automakers together produce cars. A refinery capable of producing 300,000 bbls/day of product might have 1500 employees. For comparison, U.S. refineries have the capacity to produce over 18 million bbls/day of product.

Jim

 

[SparrowHawk]

WN's hedges in recent quarters have not delivered lower all-in fuel prices than other carriers. Their hedges are average.
.
Fuel won't spike to $150/bbl because OPEC is realizing that current prices are sending the US and other countries back to old wells to dig deeper and to new sources where recovery is alot more expensive. OPEC doesn't want sustained high fuel levels and they don't want spikes because both create urgency by other countries to work to take back control of their energy costs.
And eventually that Canadian pipeline will be built.
I believe I have read that the US became a net exporter in 2011 after decades.

Just curious, what percentage of oil is produced by OPEC Members these days. I've heard it has dropped substantially.

 

[BoeingBoy]

OPEC crude production is up over the last 10 years, but down some as a percentage of world production to 44-45%.

Jim

 

[USA320Pilot]

AMR Posts Big Loss, Reshuffles Managers: February 15, 2012

By DOUG CAMERON and JACK NICAS

The parent of American Airlines on Wednesday disclosed a management reshuffle alongside a net loss of $1.98 billion for 2011 as the carrier continues efforts to restructure under bankruptcy protection.

The changes are the second shake-up since Tom Horton took over as chief executive last November, when the third-largest U.S. airline by traffic filed for Chapter 11.

A fourth-quarter loss of $1.1 billion compared with a $97 million deficit a year earlier, underscoring the challenges facing AMR Corp. as rivals that have already used the bankruptcy process to cut costs reported profits despite the latest spike in fuel costs.

AMR's fourth straight full-year loss included $917 million in special charges and compared with profits of $864 million at United Continental Holdings Inc. and $854 million at Delta Air Lines Inc.

Mr. Horton is seeking to trim AMR's annual costs by $2 billion and boost revenue by $1 billion a year, shedding 13,000 jobs in the process as part of a turnaround plan that has been lambasted by leaders of its main unions.

AMR, which also wants to terminate employee pension plans, is negotiating with unions to reduce labor costs by 20% or $1.25 billion a year. The company told unions officials on Feb. 1 that negotiations would last "a couple of weeks," said James Little, president of the Transport Workers Union, which represents nearly 20,000 AMR workers.

If the two sides don't reach an agreement, AMR could petition the bankruptcy judge to let it modify the labor contracts and impose the changes it seeks. AMR has said it has not set a timeline on negotiations.

Mr. Little said this week that his union has yet to begin substantive contract talks with AMR because it is awaiting answers from the company on how it calculated some of its targeted cost-savings. On Wednesday, Mr. Little's union, which would lose 8,800 members under AMR's plan, asked the company to offer $75,000 buyouts and medical coverage to its members that leave voluntarily.

The flight attendants' union, which would lose 2,300 members under AMR's plan, asked for full pensions and medical coverage for its members that leave voluntarily.

The management changes include the retirement of Peter Dolara, the highly-regarded head of Latin America, who oversaw what is viewed as AMR's most profitable business and a prime target of rivals seeking to acquire all or part of the company. Its senior management ranks have now been cut to 10 from 14.

Mr. Dolara's duties will be assumed in part by Art Torno, who currently oversees its business in New York, where American is squaring off for the world's largest business travel market against expansion by Delta and United Continental, relying in part on a marketing deal with JetBlue Airways Corp. AMR plans to replace Mr. Torno.

AMR said the changes were part of an effort to place all customer-facing activities in a single business unit, with airport services added to the brief of Craig Kreeger, a senior vice president.

Virasb Vahidi, chief commercial officer, will take on oversight of all international sales and marketing.

 

[Move2CLT]

AMR Corp. said Wednesday it lost $1.979 billion in 2011, more than four times its 2010 loss of $471 million.

"The Company's consolidated net loss reflects significant year-over-year increases in fuel prices, partially offset by higher operating revenues," the company said its annual 10-K filing with the Securities and Exchange Commission.

The parent of American Airlines said it lost $1.1 billion in the fourth quarter, compared to $97 million in fourth quarter 2010.

As it previous disclosed on Jan. 31, the Q4 2011 results included a $725 million write-off, mostly from a $717 million reduction in the value of Boeing 757.

In all, the quarter's special charges totaled $768 million. That included "a $43 million unfavorable adjustment to revenue, as a result of changes in assumptions related to the recognition of AAdvantage revenue."

It said the $118 million in items related to its Nov. 29 bankruptcy was "primarily due to the rejection of 24 leased aircraft: 20 MD-80s and 4 Fokker 100s, as well as professional fees."

AMR said that its Q4 2011 net income was $209 million versus $69 million in Q4 2010, excluding special items.

 

[usa1]

It said the $118 million in items related to its Nov. 29 bankruptcy was "primarily due to the rejection of 24 leased aircraft: 20 MD-80s and 4 Fokker 100s, as well as professional fees."

Who got the "professional fees", Horton's nephew ... or Baines Capital? Let the looting begin! I smell a thief

 

[gaucho99]

Looks like IAG is not considering investing in AA.

http://www.bloomberg.com/news/2012-02-15/iag-chairman-says-no-plans-to-take-stake-in-solid-partner-amr.html

 

[AAviator]

Anticipating a smooth restructuring, why would they? They see no imminent or probable danger to their interests either. They did use the terms "For the time being, it's not on the table".

Boy, how would a certain pilot spin THAT??

 

[ebwgs]

Anticipating a smooth restructuring, why would they? They see no imminent or probable danger to their interests either. They did use the terms "For the time being, it's not on the table".

Boy, how would a certain pilot spin THAT??

You seem to do quite a bit of spinning of your own.

 

[BoeingBoy]

You seem to do quite a bit of spinning of your own.

Actually not. Why would IAG invest in AA now? There is only one reason to invest while AA is in bankruptcy - to provide DIP financing which would turn into an investment when AA exits bankruptcy but AA doesn't need DIP financing. Otherwise, an equity investment if needed upon bankruptcy exit is still a possibility that IAG didn't rule out.

Jim