AA depleting $$$$$

[AC AA LA FA]

I threw this out there some time back but got no response..

Didnt AA secure monies just prior to the credit crunch hitting full on expressly for weathering the storm of this economic downturn?
A figure of $850 million rings a bell..I could be off..Theses things are not my forte..!!

I would guess this was approx. 7-9 months back..???

 

[FWAAA]

AC AA LA FA: That sounds familiar, but that amount doesn't begin to address AA's cash needs this year. In the second half of last year, as fuel prices collapsed, AA had to deposit about $550 million of cash with the counterparties to its hedge agreements and has almost $2 billion of debt maturing this year.

As to the hedges, AA is in much better shape than UA or DL, each of which had to deposit over a billion dollars with their hedging counterparties.

I think you're referring to some money that AA borrowed against some airplanes.

The other day, in the Eagle Eye, AA announced that it paid down about $700 million of maturing debt in the first quarter of this year.

 

[BoeingBoy]

Looks like AA raised:

$294 million from stock sales
$825 million from issuance of long term debt
$354 million from sale/leaseback transactions

Jim

 

[FWAAA]

As always, count on BoeingBoy to provide the facts.

That's more than I remembered, but still not enough to see AA through the current mess.

AA will end the first quarter with just $2.6 to $2.7 billion of unrestricted cash, less than half the unrestricted cash of a couple years ago. On top of that, AA still faces large cash demands during this year, including over a billion of maturing debt.

I expect to see more furniture burned and more airplanes hocked (or sold and leased back) this year.

 

[BoeingBoy]

AA was actually cash flow positive for 2008, but by only $43 million. The big change was in short term investments, which dropped by about $1.47 billion.

Jim

 

[frontline]

There's no denying that these numbers spell huge trouble ahead for our company. As I said in another thread, the day may come when TWU regrets leaving money on the table last year! But according to Bob Ownes AMR has plenty of cash, so we'll all be ok!

 

[jersey777]

Not everyone believes the airlines are doomed to fail this year. Of coarse that doesn't fit into AA's corporate plan of constantly emphazising the bad especially when it is in negotiations with all 3 unions at the same time. When fuel was sky high last year we were bombarded with statistics of how much each penny increase in fuel took away from our bottom line. WE don't hear about how much we have saved this year with oil being less then half is was last year. Now we hear about the loss of revenue. And we will continue to hear about it because that is what the company wants to emphasize. I read recently from an analyst that revenue would have to fall 20% to equal the savings from the drop in fuel. Since revenue has fallen in the 10-15% range then theoretically we should still make a profit. Time will tell but in the meantime everyone throw up their hands and start looking for a new career.(sarcasm). See article below from this week:

http://startelegram.typepad.com/sky_talk/2...ts-in-2009.html

 

[Skymess]

Here's the unpopular thought of the week: Why don't they just furlough the 1500 that we're still over now? Maybe they could do that until the economy comes out of it a little and then we might be able to call people back, as opposed to having people on the furlough list until their time runs out.

Why that won't happen: Because the more money we actually make the better the contracts we all get.

The economy sucks, we are all well aware of that. Those of us flying are also well aware that we have a major overage that hasn't even been dented with the latest furloughs. We all know they are nickel and diming us in small furlough increments to break us down, make us weak, and make us scrap with each other like pit bulls.

When they finally break us you'll see people voting to pay to come to work.

 

[Hopeful]

But according to Bob Ownes AMR has plenty of cash, so we'll all be ok!

They do! Just ask the PUP happy executives.

 

[nbmcg01]

Here's the unpopular thought of the week: Why don't they just furlough the 1500 that we're still over now? Maybe they could do that until the economy comes out of it a little and then we might be able to call people back, as opposed to having people on the furlough list until their time runs out.

Why that won't happen: Because the more money we actually make the better the contracts we all get.

The economy sucks, we are all well aware of that. Those of us flying are also well aware that we have a major overage that hasn't even been dented with the latest furloughs. We all know they are nickel and diming us in small furlough increments to break us down, make us weak, and make us scrap with each other like pit bulls.

When they finally break us you'll see people voting to pay to come to work.

Why would any company let f/as on a guarantee sit around doing nothing...fly them as "extras. Bump up the customer. What a concept for a customer service based business...put the customers first. AA still hasn't learned that the if the internal customer is happy the external customer will be too.

 

[BigBangTheory]

Here's the unpopular thought of the week: Why don't they just furlough the 1500 that we're still over now?

You may get your wish. Rumors are flying high that AA will furlough another 1500 by the end of summer.

 

[Ralph]

Let's stick to the topic, folks. The topic is AA depleting cash. There are already two threads devoted to possible layoffs, one specifically regarding flight attendant furloughs.

Layoffs

Flight attendant furloughs

thank you.

 

[jersey777]

Could someone with more knowlege explain to me why AA is investing in new airplanes, adding wireless to aircraft and expanding and renovating the LHR Admirals Club when we are supposedly on the road to bankruptcy as some have said on here. It just doesn't make sense. Another thing, we are still greatly overstaffed in the flight attendant ranks even after the furlough yesterday. Why is AA paying to keep people on the payroll when they need to save as much money as possible? This just doesn't add up to me. On the one side of their mouth management is dangling gloom and doom and on the other they are making business decisions that don't conserve funds. What gives?

 

[Hopeful]

The gloom and doom part is for the mediators assigned to the union negotiations. The investment in equipment and facilities is for the flying public and wall street. That's the part they are more concerned with in the hopes of having the stock price increase for the executives.

 

[PHL]

They need to invest in new aircraft to a.) remain competitive and b.) get rid of those mad-dogs that consume too much fuel. SO, in the long run that's a savings.

They need to keep their product fresh and competitive. Especially if it will pay for itself in a given period of time (which I'm sure they've crunched the numbers to figure this out).

They need to keep their premiere clubs up to date because, at LHR in particular, there are plenty of premium travelers who's ticket prices cover the costs of the renovations.

The only people who have said AA is on the road to bankruptcy are the naysayers and arm-chair CEOs.

US Airways let their product go to pot over the years before finally making product improvements (which still lag behind their US competitors). In the process they drove a lot of their very long time customers away to other airlines like AA and CO, which in turn takes away their most important revenue - high yielding business travelers. They will probably not get those customers back, as they continue to make changes that are clearly not customer focused. Every airline CEO seems to understand this concept except Doug Parker (US CEO)