AA will be bankrupt soon?

[700UW]

Nope, wrong again,

Parker and Lakefield were cochairmans, Lakefield raised the money and yes Parker ran the combined company as Lakefield was a caretaker CEO who at the request of his best friend David Bronner, head of the RSA and owner of US Airways at the time, asked him to run it when Siegel was fired. Lakefield had no intentions of running the combined company at 65 years old and retired from American Express and living in Fort Meyers, FL. Yet Lakefield remains a hands off executive and board member.

Love how all you AAers seem to know the goings on at US when you werent there, didnt work there and didnt live it.

I did.

US Airways, dont know who US Air is, they havent been around since 1995, it was a merger not an acquisition, is that so hard to understand?

Unlike what AA has done to Reno Air and TWA.

 

[JimJimmyJim]

I think this could move to the US Air thread.

 

[FA Mikey]

Love how all you AAers seem to know the goings on at US when you werent there, didnt work there and didnt live it.

Well it was a thread about AA, some how you have managed to turn it into a Usair thread.

 

[777 fixer]

On thing is for sure a trip or two to BK court will result is an airline paying more than one that has not. Look at TWA and what they were paying for aircraft leases.

 

[700UW]

The laws have changed since TW filed, you can only not pay leases for like 60 days and the market on supply and demand drive the costs.

 

[eolesen]

700UW, spin the US/HP merger all you want to, but the only people holding onto the myth of it being a merger of equals vs. an aquisition are the US East employees. The corporate survivor is HP, they're still based in Tempe, using Shares, and there are hardly any of the senior managers from the old US left. If it weren't for the fact America West was still perceived as a regional carrier, the name might not have survived either.

The point being made about the TW leases has nothing to do with walking away from the leases in bankruptcy --- it has to do with their risk of default. Leasing aircraft is one place where supply and demand is a secondary factor in pricing. Risk of default is king there.

After BK2, TW went on a fleet modernization program, but the lease rates they were paying were 30% or higher than what the same lessors were willing to offer more solid carriers. It's a reflection of the risk of default. TW had already fleeced the banks twice, and anyone considering leasing to them was going to front-load the lease as much as possible to manage the risk of a third default. The banks were eventually proven right in those risk assessments.

AMR approached all the lessors, and got more favorable terms because of their bankruptcy-free credit history.

Given that both US and HP have failed a total of three times, I can pretty much guarantee you're not getting most favored nation status when it comes to lease rates. Probably not as high as some other carriers, but it's definitely not going to be the floor price for a given airframe. That's going to continue to be the carriers who have good credit and a low risk of default.

 

[MCI transplant]

<_< ----- All the more reason AA will avoid bankruptcy, no matter what they threaten!

 

[Man of the People]

I can guarantee you'll be happy about those new (fuel efficient) aircraft when oil pushes back past $100 or $150. The airlines with the newest, most fuel efficient fleets will be the ones to survive the next oil price spike. Retiring those MD80s as quickly as possible is a very smart management decision, for those of you who think management sits around all day and produces nothing but spreadsheets.

Why not hedge the fuel now while it's relatively low? When fuel was around $50.00 this brain trust was still paying $112.00 per barrel with the fuel hedging. Why not follow SWA's fuel hedging pattern and load up, keep the MD80s until the economy turns around. Who cares if you burn more fuel, as long as you're paying less for it. Management is not smart enough to get in front of the fuel price. If that turns out to be the case, we will be paying off high cost aircraft along with high fuel.

Hello, employees... Can you take another pay cut to compensate for our mis-management once again?

 

[700UW]

Actually US leaseholders are actually taking planes back from them because they can lease them out at higher rates, especially the 757s nine of them are going back, that is why US is purchasing 21 A321s this year and expanding International with five A330-200s and might be returning a couple of old 767s.

Like 99% of US' fleet are leased or encumbered.

 

[Edward]

Folks this is an AA thread & is about AA NOT what happened at US. Lets get back on topic.

 

[700UW]

Sorry they mentioned concessions, bankruptcies and etc so I gave examples of what happened, sorry once again.

 

[FrequentFlierCA]

Why not hedge the fuel now while it's relatively low? When fuel was around $50.00 this brain trust was still paying $112.00 per barrel with the fuel hedging. Why not follow SWA's fuel hedging pattern and load up, keep the MD80s until the economy turns around. Who cares if you burn more fuel, as long as you're paying less for it. Management is not smart enough to get in front of the fuel price. If that turns out to be the case, we will be paying off high cost aircraft along with high fuel.

Hello, employees... Can you take another pay cut to compensate for our mis-management once again?

Oil can do funny things in the short term. Hedging is a double-edged sword and should be used carefully to reduce exposure to a rapid price increase. If they are "betting the farm" a price turn in the opposite direction could cause big mark-to-market losses and cause AA to breach loan covenants. It's not as simple a game as it might appear.

I think management is very much smart enough to hedge as protection. But they are airline people, not hedge fund traders, and should act accordingly.

 

[frontline]

<_< ----- All the more reason AA will avoid bankruptcy, no matter what they threaten!

Of course they will try to avoid it - bankruptcy is bad for everyone except the attorneys.

But that is not to say that they have the power to avoid just because they want to. I maintain my previous position that now is the exact wrong time for employee groups to push really hard (to the point of calling a strike) for "restore and more". It will have the opposite effect we want: we'll end up with lower wages (via contract abrogation in court) than we have right now.

 

[MCI transplant]

Of course they will try to avoid it - bankruptcy is bad for everyone except the attorneys.

But that is not to say that they have the power to avoid just because they want to. I maintain my previous position that now is the exact wrong time for employee groups to push really hard (to the point of calling a strike) for "restore and more". It will have the opposite effect we want: we'll end up with lower wages (via contract abrogation in court) than we have right now.

<_< ------- You maybe right! And maybe not! ------- But then again, when is it a good time? :huh:

 

[Joe Patroni]

The one thing you have to is remember the airline industry will never return the what it was prior to 2000. Those days are gone forever.