Extension of CARES act less likely

Discussion in 'The Water Cooler' started by V.O. Reason, Sep 9, 2020.

  1. CremaDiLimone

    CremaDiLimone Veteran

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    from what i heard the other day, mia is a total $hit$how regarding transfers and layoffs. dozens and dozens of grievances already filed.

    i heard FSC are getting laid off after selecting clt for a transfer - while FSC with less time are getting clt transfers.
     
  2. ALUS78

    ALUS78 Veteran

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    But the whole point is/ was to save jobs why would the Gov give money after the jobs are gone? Are you saying they will call the people back? Or the airline will simply pocket the money? I doubt the cares act (separate from the loans) wouldn't include some type of payroll or employment stipulation, what would be point
     
  3. CremaDiLimone

    CremaDiLimone Veteran

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    the whole point was to save jobs???

    saving jobs was payroll grants. combined with the loans, it was about saving the airlines from BK.

    clearly, the airlines want to layoff. the optics are poor if they receive payroll money prior to sept. 30 and layoff.

    i suspect payroll grants will be made available again after layoffs in the industry. remember, there is still govt. loan money available.
     
  4. ALUS78

    ALUS78 Veteran

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    I was under the impression they were lobbying for the 100,000 + jobs that are going away in October.We shall see
     
  5. Talos

    Talos Senior

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    The airlines do want to layoff and then get aid. Makes it better for them for sure. I hope bankruptcy can be avoided, but this Covid has pretty much devastated the airlines and still is. Knowing how airlines have used bankruptcy in the past, I get the feeling they would look at this ugly situation and use it again. They have a great excuse.
     
  6. Kev3188

    Kev3188 Veteran

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    They told Wall St. that they intend to use AAdvantage as collateral for a government loan.

    Respectfully disagree. I don't see anyone filing anytime soon. That said, I also don't think we'll see the sort of "quick trip" through CH.11 like we've seen previously- not just because the laws have changed, but because the access to DIP financing simply won't be there. Anyone heading to the courthouse will be going to file CH7. I hope I'm wrong.
     
  7. CremaDiLimone

    CremaDiLimone Veteran

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    that's all the money right there. optics are very bad from all angles - especially for politicians. the horse before the cart.
     
  8. CremaDiLimone

    CremaDiLimone Veteran

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    prior to the cares act being enacted, i was told that aa would go that route for private financing. the cares act was enacted and the company has gobbled up fed loans. with it's poor credit rating/debt, i doubt the company would have found better finance deals from the capital markets.

    the research i did, told me that the loans are 1% above the libor rate. according to the govt., the loans:

    if layoffs occur and a similar relief plan (especially payroll grants) comes through, i agree, no BKs. if not, it will only be a matter of time, unless travel picks up thanks to a bona-fide therapeutic/vaccine for the virus.

    my opinion is that the financial recovery for the airlines will be quicker than anticipated. if we see the up-stroke of a W or V-shaped national economic recovery...demand will be so strong i can see fares 10+% higher than the same times pre-virus.
     
  9. eolesen

    eolesen Veteran

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    Once the federal money dries up, airlines are in varying degrees of being able to weather the drought, and I think most analysts concur that meaningful recovery won't be seen until late 2021. Sure, people will buy leisure tickets at $59 one-way, but for the most part, business traffic is gone. Convention traffic is definitely gone, as is cruise traffic and more importantly for AA, international traffic.

    Apparently, AA has also been lobbying the Feds to make more of what's left over from the original $25B available to them, since UA and DL have already signalled they don't want any more loans or the strings attached.

    Question seems to now be whether or not the government wants to take on the added risk. Whatever AA can offer in terms of collateral or warrants is of less value today than it was last May. The debt community also seems to be betting against AA right now (credit default swaps continue to be priced 10x higher than they were a year ago, compared to ) At the height of the speculation for an AA bankruptcy prior to the CARES act, AAL swaps were priced 2x higher than swaps for UAL and 20x those for Jetblue.
     
  10. swamt

    swamt Veteran

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    That sounds just like the old way TWU juniority system...
     
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  11. swamt

    swamt Veteran

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    Fox News just showed all airline CEO's at White House after meeting with Trump to help encourage an agreement soon from congress. Even Parker showed up this time. Parker did state that come Oct 1st if no action is taken the layoffs will start. The reporter then said that Southwest and Delta are not saying the same as the other airlines as far as the layoffs coming Oct 1st if no action is taken prior to.
    So last week it was the unions visiting the WH for the same reasons, this week it's all the Airline CEO's. Both confirming that Trump is 100% on board with extending some assistance. Could end up as a last hour agreement. Pelosi has stated they are staying in until an agreement is done too. Stay tuned folks...
     
  12. CremaDiLimone

    CremaDiLimone Veteran

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    well, the airline execs. and unions met with pelosi on friday. so, next week is do-or-die week.

    pelosi is on the record as rejecting any clean stimulus bills. only her all inclusive bill or nothing.

    she said that and then attempted to pass a clean post office bail-out bill. hmmm..

    ok. trump is on record saying he has no problem with a clean airline bill from pelosi. i'd say it's all on pelosi and the democrats now.
     
  13. 1AA

    1AA Veteran

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    Seems the President wants to help the airline industry to the point of signing a executive order. The speaker of the house wants more to go to other non essential or lower priority items. The politicians never lose money or benefits when crises like this affect the American workers so they don't feel the pain. At least the President is trying to get things moving along in the right direction. This is just another example on politicians more concerned about their party over the American people. This really sucks because in about a week from now the airlines will start furloughing workers.
     
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  14. Talos

    Talos Senior

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    You've got that right 1AA. Politicians don't feel the pain. Not until they get booted out of office and even then they are still set for life.
     
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  15. Talos

    Talos Senior

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    The way the two political sides are going at it I don't see a deal this week. Hope I'm wrong. With Ginsberg passing away another large fight on the horizon. Wish the election was over, and maybe they will be more apt to negotiate. Maybe not.
     

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