when no one is flying, no airline can come up with a successful plan. the only plan is to get aid from the govt. and pay them pay back incrementally.
that is everyone's plan. united can't survive without the aid, just like everyone else. if united gets aid, so will aa and dl.
AA is seeking the largest bailout of the Big Four -- they're "only" getting $8.85B right now, and they have to repay $1.7B of that, and giving up around 3-5% ownership stake to the Feds in the form of warrants.
My guess is that's enough operating cash for about 14-16 weeks. But hey, the government is here to save y'all.
WN is only asking for $3.3B. United and Delta haven't said exactly how much, but it's estimated around $5-7B each plus 2-4% in terms of warrants.
the u.s. treasury doesn't care what your debt load is.
aa says they will apply for another $4.75 billion loan from the u.s. treasury.
WN took a total of 3.3B.
UA took $3.5B and $1.5B as a loan, total $5.0B
DL took $3.8B and $1.6B as a loan, total $5.4B
AA took $7.1B and $1.7B as a loan, total $8.8B
Grants were based on documented payroll costs, and on the surface, AA's appear to be about double that of their two largest competitors. If that's not a warning to the AA folks that y'all are in trouble come October, I don't know what is...
The messaging from DL and UA is definitely transparent, and it's something that those employees are used to by now. My guess is they're hoping more people leave before 10/1 so that the involuntary actions are minimal. Existing buyout incentives have moved some folks to leave already, and I personally know others who plan to bail as soon as they secure something. Hiring's frozen at most companies as long as lockdowns continue, but should resume before Memorial Day.
Now, E. There you go again tryin' to confuse these nice folks with facts.
“Grants and loans should provide sufficient support for the industry through the end of September,” he wrote in a note published Wednesday.
“The equity dilution risk is more moderate than we had previously believed,” Bernstein analyst David Vernon wrote in a note published Tuesday. Cowen analyst Helane Becker concurred, writing that the grant amounts are lower than anticipated, likely because the bailout program was oversubscribed with a high participation rate.
Each airline will receive grants worth 76% of their payrolls, based on labor costs for the second and third quarters of 2019.
Thirty percent of the grants will be debt payable over 10 years at low interest rates: 1% above Libor (a short-term benchmark rate) for the first five years and 2% above Libor in the next five years. The Treasury department will receive 10% of the loan portion of the grants as warrants, pegged at strike prices from April 9.
Do you not read the information that the company put out?
Hey I get it they are not totally trustworthy but the money will help maintain the operations until September.
AA had more on hand cash before all of this which factors in and they also had secured loans prior to this deal.
Plus they said there is likely to be another loan they will use.
It’s obviously anecdotal, but in my experience, AA employees seem to be in the most denial about the gravity that of all this. I’m not singling anyone here out; I’m talking about friends I speak to, social media feeds, etc.