AA has told us that BK is not going to happen, they will never loose control of the company.
They will sell A/C and downsize b4 they file BK ... 7B will buy them alot of time...
AA is prepared for this downturn in many ways....
Perhaps, but a few facts....
First of all, nobody interested in buying AC of AA's vintage right now. The 762's are quite long in the tooth, as are the bulk of the 757 and 763s. The 737's are needed for their fuel economy, as are the 777's.
Second of all, there's little left to sell that isn't already encumbered by mortgages. AA would have to buy their way out.
Last, $7B might seem to buy a lot of time, but with oil officially breaking the $100 barrier today (closed at $99.62), and having stayed above $90 for the past month, it's not going to buy as much time as it would have four years ago.
Keep in mind that 2007's fuel bill will be approx $6B (AMR uses about 750M gallons per quarter, and estimated a weighted cost of approx $2/gal). If you assume that price to be $2.30/gallon going forward, that's a $7B fuel bill in 2008.
Going in with a prepackaged filing greatly reduces the chance of AMR losing control.
Bankruptcy would allow AA to get out from underneath at least 100 MD80's with leases expiring in 2010 thru 2015, and another 50 or so MD82's with leases running thru 2022 (former TW).
It would also allow them to get out of 21 of the A300 leases, which expire between June 2008 and August 2011. IIRC, there are also a handful of F100s which are stored at MHV but still on lease until 2014.
Then there's the labor agreements....... AA has all three up for renewal, and all three unions have made promises to their members that AMR can't possibly meet.
2001 was a perfect storm driven to a large degree by the burst of the technology bubble, and made worst by terrorism and sustained somewhat by fears of a SARS pandemic.
2008 is looking to be another perfect storm, but this time being driven by oil, and to a lesser degree, the burst of the housing & mortgage bubble. Throw in fear of an avian flu pandemic for good measure.
If AMR is well prepared for that, then I guess I don't see how. Sure, they've got a lower debt load than they did three years ago, but there are still serious systemic issues with regard to labor costs and fleet mix, and they've got the most dysfunctional alliance situation possible when compared to Skyteam and Star Alliance (no immunity with BA and aside from QF, relatively weak partners in Asia and South America).