jimntx
Veteran
Though the total debt load of AMR needs to be reduced somewhat, don't assume that the goal is to be debt-free. I know that we as individuals are harangued in the media almost daily about "get rid of credit card debt/pay off your mortgage early/drive your car 2 years longer."
However, what is true for individuals is not necessarily true for corporations. Being debt-free for a corporation means losing some MAJOR tax advantages. And, as long as the debt is secured debt, the financial markets are available to the company. The problems arise when you need financing, but you have nothing left to put up as collateral. I'm not sure we are there quite yet--close, but not yet there.
Oh, and having $3 billion in the bank is a definite plus. (I agree that we are hoarding cash right now in case some attractive assets should become available in the open market. Can you say slots at DCA and LGA, children? That's right. I knew you could.)
However, what is true for individuals is not necessarily true for corporations. Being debt-free for a corporation means losing some MAJOR tax advantages. And, as long as the debt is secured debt, the financial markets are available to the company. The problems arise when you need financing, but you have nothing left to put up as collateral. I'm not sure we are there quite yet--close, but not yet there.
Oh, and having $3 billion in the bank is a definite plus. (I agree that we are hoarding cash right now in case some attractive assets should become available in the open market. Can you say slots at DCA and LGA, children? That's right. I knew you could.)