LGA Fleet Service
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Can The Financial Wizards Explain?
- Thread starter Decision 2004
- Start date
Fly said:
Don't be so sure, Fly. 😛
Record high fuel prices and low fares dragged down by bankrupt carriers and AA still managed to keep its cash flow positive in Q1 even while contributing $138 million to its pension funds (of its expected $310 million contributions in 2005).
And over at UAL, there's stike (liquidation) noises coming from the AFA.
See you in the Pacific Rim. That NRT hub will be sweet. B)
Know what I've never wished? Your destruction.
fyi - It's not difficult to be cash flow positive........ever hear of "cash advance" on a credit card?
Don't cry too hard when AA comes crashing down. They will.
(for those that don't know....I have NO PROBLEM with American Airlines....only morons who want to "bottom feed" because they know nothing else. Wonder if he eats out the chick after she's been gang banged too :huh: )
fyi - It's not difficult to be cash flow positive........ever hear of "cash advance" on a credit card?
Don't cry too hard when AA comes crashing down. They will.
(for those that don't know....I have NO PROBLEM with American Airlines....only morons who want to "bottom feed" because they know nothing else. Wonder if he eats out the chick after she's been gang banged too :huh: )
eolesen
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Decision 2004 said:
You've gotten some great answers to this question... bottom line is that if we restructure and emerge from bankrupty, we really don't get to walk away from all of the debt. Some of it gets swapped for new debt, which is still debt. And very little of our current debt is unsecured. We've mortgaged just about everything, if not everything.
Bankruptcy also follows you for a long time... call up a mortgage broker some time and ask what the interest rates and downpayment requirements are following a personal bankruptcy or foreclosure....
Some of TWA's aircraft lease rates after their first two filings were at a double digit premium. Same thing happens with lines of credit, and credit card holdbacks (the amount that the credit card companies allow you to get in advance of travel).
Basically, after a bankruptcy, as stated, everyone regards lending to you as being as risky as giving you equity, and demands pretty much same level of return (so no more borrowing at +2-3% to treasury, now you are borrowing at +10% to treasury) Plus the covenants get tougher (much larger cash balances must be kept, permission must be sort before doing anything) as the bondholders intervene more with running of the company - with the difference that bondholders are much, much meaner and nastier than shareholders when it comes to it, because they have only downside, no upside.
Connected1
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Cash flow from the operation itself was $465M in the first quarter (an annual rate of $1.9B+), UP from $371M last year. Operating cash flows exclude any cash received from borrowing. Despite rising fuel costs, our aircraft, facilities, and employees are actually generating more cash than they are consuming. So long as operating cash flows are positive and growing, we will be able to get out from under our debt load and reduce our bankruptcy risk. It could take a while, but we will get there eventually.Fly said:
Decision 2004
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I find it very interesting that the yield on tickets is supposed to be way down, yet cash flow is above expectations.
Yeah sure load factors are high.
But a half full plane at $500 per ticket is not much different than a full plane at $250 per ticket in cash. However, given fuel burn for the weight of extra passengers and baggage, the full plane is much worse.
I still cannot help but be very skeptical about the financial numbers being floated.
They wouldn't cook the books and lie to us would they? And then send a few sympathetic alias weilding mangagement types to spread the lies on the internet bulletin boards?
Yeah sure load factors are high.
But a half full plane at $500 per ticket is not much different than a full plane at $250 per ticket in cash. However, given fuel burn for the weight of extra passengers and baggage, the full plane is much worse.
I still cannot help but be very skeptical about the financial numbers being floated.
They wouldn't cook the books and lie to us would they? And then send a few sympathetic alias weilding mangagement types to spread the lies on the internet bulletin boards?
No, but you could walk away from a lot of it and also get out of buying more new airplanes and building more new terminals.
You are comparing apples and organges by comparing corporate Bankruptcy and personal BK. With Corporate BK management is often replaced, however with personal BK the same person is involved. With corporate BK the company normally sees an "overhaul of management, with personal BK its the same person, they simply wiped the slate. Lenders have no real reason to believe that the person has or will change the behavior that put them into BK but with the change in management they have the expectation that the corporation will change.
As you said "some". Other factors could have been involved too such as the demand for aircraft at the time the signed the leases etc.
From where we are the company probably would have been better off in BK. The liabilities that they had before our concessions are still in place so the only ones that have lost anything so far at AA were the employees. The losses we saw outside of BK were in excess of what some of the workers saw at airlines that actually went BK. In other words we lost more outside of BK than we would have in BK. This is not the case for everyone else, including the TWU who still get their $3.1 million in illegal corporate funding. If the company had enterred BK you could be sure that little slush fund would have dissappeared.
NewHampshire Black Bears
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Fly said:
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ATTENTION MODERATERS !!!!!!!!!!!!!!!!
This wording used by "fly" in this post NEEDS TO BE DELETED, and any "repercussions" that may follow !!
You moderators and regulars know me here for a while, and Know I'm not bashful, or "prude" !!!
BUT this particuliar post CROSSES THE LINE. YOU know it, I know it, and I dare say, fly knows it.
If I want to watch/read/hear CRAP like the Howard Stern show, I don't need to log on to US Aviation.com, to do it.
Moderators, AM I WRONG ????????????
NH/BB's
Connected1
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I have been employed by the company in the past, but I am not currently on the payroll. I have never even spoken to Arpey or Beer. I rode in an elevator with Carty once. Does that count as being in cohoots? 😛Decision 2004 said:
First of all, cash flow is good - not necessarily above expectations. From our earnings release, you can see that our non-fuel unit costs are down somewhere around 4% year-over-year due primarily to productivity improvements (my guess: full impact of pilot productivity increases negotiated in 2003). Having Easter in the first quarter helped out revenue, as did some fare increases that occurred in March.
Lastly, cash is the last thing on the books that can be fudged. The company's financials are audited by a professional accounting firm (Ernst & Young) whose very existence depends upon its independence from the company and integrity of work. Ernst & Young verifies that American has the cash in their bank accounts. There is never a debate on the number.
TIME FOR CHANGE
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Grow up you looser better yet go file an artical 32.
Are you offended did it hurt your virgin eyeballs to read that post.
How many times did you have to read it to get offended. And BTW lets leave Stern out of this
Fly said:
Gosh, Fly, I've never wished for YOUR destruction, either.
I only want to see your employer (and USAir) go out of business so that AA, DL, NW and CO have a chance to avoid the same fate as UAL and USAir. So my friends at AA might get to keep what little they still have left, that's all.
It's nothing personal, Fly. Don't know why you take it so personally. Perhaps you should get professional help.
I understand your frustration and the pain you must feel working for such a lousy employer. But its problems aren't my fault or your fault. May you find suitable and satisfactory employment once the inevitable occurs. But don't apply at AA, please. I can just tell from your posts that I don't want to be sitting in your cabin, ever. B)
peasant said:
Just a thought...
I agree but let's say AA goes BK, which would lead Delta, CAL, NWA, and a bunch of smaller ones into BK whether they want to or not. Now you have 3/4 of the US airline capacity in BK, does our risk level remain as high? The banks are in the business of making money to, if they continue the higher risk interest rates, they will cause the resulting liquidation of some airlines and lose business themselves.
I also am not blind to the fact that Wall Street(creditors) are calling the shots on the union-busting(restructuring of contracts for some) thats going on. Since they control the money and until some union steps up to the plate and strikes, they will continue to control the wages paid to the workforce, I really don't see the airlines as such a high risk. Fuel being the only wild-card but even that price is controlled by Wall Street. 😉
Connected1
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Yes, especially for debt that is backed by assets (aircraft). If the entire airline industry is in bankruptcy, that means that there is no market for the aircraft that serve as collateral for our loans. If you can't unload the aircraft, then you can't repay the creditors. The creditors would view this as a devastating scenario.AMFAMAN said:
