Extension of CARES act less likely

[CremaDiLimone]

Same to you bro. I will say this... I've seen that apparently CLT RIF has already been screwed up by mgmt. It's quite despicable to say the least. But its literally unfathomable that not only does the company not admit to their mistakes but how flippin bad is it for rest of the system. Potentially 1000s of human beings livelihoods uprooting or worse. It's just completely insane the bs the mgmt team is doing. N not to admit their faults. Next thing I believe to hit us is CH11 bankruptcy.

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.

 

[ALUS78]

as i far as i know, aa has applied for and received $1.7 billion + $4.75 billion in loans from the treasury dept. the loans are low interest - i believe the rate is 1% above the LIBOR rate...cheaper than getting private financing. you can look up the LIBOR rate, it's the rate that banks charge each other for loaning money.

aa had also contemplated using it's frequent flier program as collateral for private financing - something the delta has said it will do.

i believe there is more govt. loan money available, if needed. the govt. made $25 billion available in loans to all the airlines.

i believe more payroll grants are coming, but, conveniently after sept. 30. you better believe the airlines want to layoff and the airlines have lobbied congress their perfect scenario.

to be honest, you seem almost hysterical about the possibilities and probabilities of BK. what is going on right now, is hurting all the airlines, and believe it or not, - even airlines with less debt than aa. my thinking is that if one airline files, all the airlines file within weeks..no airline has a monopoly on the tiny revenues coming in from fliers at the moment and airlines in BK have a distinct business advantage over competitors who are not in BK.

this is why the govt. acted in april and in my opinion, act again - after sept. 30. they can't have the entire industry filing for BK.

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

 

[CremaDiLimone]

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.

 

[ALUS78]

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.

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

 

[Talos]

as i far as i know, aa has applied for and received $1.7 billion + $4.75 billion in loans from the treasury dept. the loans are low interest - i believe the rate is 1% above the LIBOR rate...cheaper than getting private financing. you can look up the LIBOR rate, it's the rate that banks charge each other for loaning money.

aa had also contemplated using it's frequent flier program as collateral for private financing - something the delta has said it will do.

i believe there is more govt. loan money available, if needed. the govt. made $25 billion available in loans to all the airlines.

i believe more payroll grants are coming, but, conveniently after sept. 30. you better believe the airlines want to layoff and the airlines have lobbied congress their perfect scenario.

to be honest, you seem almost hysterical about the possibilities and probabilities of BK. what is going on right now, is hurting all the airlines, and believe it or not, - even airlines with less debt than aa. my thinking is that if one airline files, all the airlines file within weeks..no airline has a monopoly on the tiny revenues coming in from fliers at the moment and airlines in BK have a distinct business advantage over competitors who are not in BK.

this is why the govt. acted in april and in my opinion, act again - after sept. 30. they can't have the entire industry filing for BK.

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.

 

[Kev3188]

aa had also contemplated using it's frequent flier program as collateral for private financing - something the delta has said it will do.

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

my thinking is that if one airline files, all the airlines file within weeks...

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.

 

[CremaDiLimone]

The airlines do want to layoff and then get aid.

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

 

[CremaDiLimone]

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.

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:

The Treasury Department didn’t disclose the amounts and terms of the loans, for which airlines were required to put up equity, warrants, or senior debt to compensate taxpayers. But executives have been previewing the amount they expect to receive.

American Airlines CEO Doug Parker told staff that the airline expects to finalize the $4.75 billion-loan in the third quarter. Last month he told shareholders that the carrier plans to use cash flows from its AAdvantage frequent flyer credit card as collateral.

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.

 

[eolesen]

i believe there is more govt. loan money available, if needed. the govt. made $25 billion available in loans to all the airlines.

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.

 

[swamt]

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.

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

 

[swamt]

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...

 

[CremaDiLimone]

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.

 

[1AA]

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.

 

[Talos]

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.

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.

 

[Talos]

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.

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.