Has a deal been made?

[usfliboi]

How many threads do we need about a possible AA/US merger?

Who would lend US money to buy AA when six years later it even hasnt completed the US/HP merger?

I think you have missed something! The merger has been completed..Final contracts missing between only two groups doesnt dictate a failed merger lol .and Doug addressed "last week in Charlotte" the financing for a potential merger with anyone ....If it makes "cents" financing is not a big deal! Lets make sure facts stay in play here

 

[Reed Richards]

Does anyone besides me think that it's very strange that AA would file for BK with $4 billion in the bank? That is unheard of in the airline industry. And they were supposed to have spun off Eagle first which didn't happen. Remember that Arpey was CEO & Chairman of the BOD. And yet the BOD outvoted him to file for BK with so much money in the bank. Just think that something has already been worked out. Some hardline AA employees might not like to hear it but what other explanation is there? AA could have waited a few months or even a year before filing. I know it's too early in the process to figure out what's going on but I am just suspicious for the BK filing right now.

The way I understand it someone has to finance AMR to get OUT of BK. Not the best world out there for getting someone to pony up (unless you talk to Parker..says he has all the donors he needs) so they made sure they had enough money going in to get out.

At least initially, this gives them a little more say in how things go. I believe NWA did it this way. Word on the street was 4B was the minimum amount they wanted to sink to, based on their size. So some were indeed predicting BK "any minute now." They were right.

And nobody wanted Eagle. Look for it to be given a pretty bad haircut as AMR dumps the unwanted RJs.

Now someone with a real financial background can come here and tell you the real story. But that is my understanding.

RR

 

[Phoenix]

Whats in it for AA is irrellevant, It's is US aquiring AA, according to the many unofficial reports. So what AA gets out of it really is not a concern for US. Just Sayin

Don't be a Dick and make this into an east/ west thing ok .

Not an East and West thing, its an AA/LLC thing, right? The presumed AA/LLC acquisition (It ain't a merger..) ain't even "a thing", and folks are posting beat downs on AA for being purchased by LLC.

And folks call AA AArogant.

P.S. You have an ignore button.

 

[prechilill]

The way I understand it someone has to finance AMR to get OUT of BK. Not the best world out there for getting someone to pony up (unless you talk to Parker..says he has all the donors he needs) so they made sure they had enough money going in to get out.

At least initially, this gives them a little more say in how things go. I believe NWA did it this way. Word on the street was 4B was the minimum amount they wanted to sink to, based on their size. So some were indeed predicting BK "any minute now." They were right.

And nobody wanted Eagle. Look for it to be given a pretty bad haircut as AMR dumps the unwanted RJs.

Now someone with a real financial background can come here and tell you the real story. But that is my understanding.

RR

Sounds reasonable. I question whether AMR needs exit financing to any great degree (if any), what they get out of lease savings, dumping Eagle and most importantly screwing labor should significantly affect their obligations going forward which translates to an easier exit with 4 billion in the bank. Getting financing shouldn't be that hard, Parker indicated he could get it and I doubt Parker posesses any special powers his ex-partner now running AMR can't do. The next 90 days they will also be banking money, more than ever before while they enjoy the honeymoon of their CH11 filing. It is hard to nail things down either way because so much information is sequestered, but this certainly isn't a US2, AWA or UAL2 type of BK.

 

[icehead]

Does anyone besides me think that it's very strange that AA would file for BK with $4 billion in the bank? That is unheard of in the airline industry. And they were supposed to have spun off Eagle first which didn't happen. Remember that Arpey was CEO & Chairman of the BOD. And yet the BOD outvoted him to file for BK with so much money in the bank. Just think that something has already been worked out. Some hardline AA employees might not like to hear it but what other explanation is there? AA could have waited a few months or even a year before filing. I know it's too early in the process to figure out what's going on but I am just suspicious for the BK filing right now.

Going into BK with four billion with a fully intact Airline makes sense to me. It keeps the vultures at bay while you reconfigure. Money like extra fuel gives you options.

 

[AAviator]

Ya'll need to re-read Jims last sentence in post 23.

Understand who is on the committee. Also, understand what that committee will be looking at going forward, vs. what is taking place in your heads now. Understand HOW DP came up with the funding necessary to make the almost 10B offer for delta, and why that avenue isn't available today (stock price).


On a side note: I just got a new CLT 10-9 page in my most recent Jeppesen revision. Why hasn't USA320PILOT run this up the flagpole as evidence of a done deal????????? :wacko: :wacko:

 

[AAviator]

One more point....

An option the creditors can elect to take is an equity position in the new AA post BK in lieu of a pot of money from DP. Thiink of how Delta ultimately "Shunned" LCC.

 

[Jester]

Does anyone besides me think that it's very strange that AA would file for BK with $4 billion in the bank? That is unheard of in the airline industry. And they were supposed to have spun off Eagle first which didn't happen. Remember that Arpey was CEO & Chairman of the BOD. And yet the BOD outvoted him to file for BK with so much money in the bank. Just think that something has already been worked out. Some hardline AA employees might not like to hear it but what other explanation is there? AA could have waited a few months or even a year before filing. I know it's too early in the process to figure out what's going on but I am just suspicious for the BK filing right now.

It should be noted that United filed BK with nearly $2 billion in cash and near cash on their books about 9 years ago? If there was a lesson (among many) to be learned from Braniff Airlilnes, it was not to wait until all the cash was gone before filing for bankruptcy. It is all about money and the ability to "re-organize" (i.e. cut debt and hammer contracts) depends having the financial means to do so. Often times companies will look for DIP (debtor in procession) financing to provide the necessary funds, but there are certainly no gaurantees anyone would provide money, especially if there are few unincumbered assets to take as security even as DIP financing provides seniority status over other creditors and stockholders. That was the problem with US Airways filing Ch. 22 (that's Ch. 11 twice) so close together as the first BK DIP financing already liened the available assets, and now there was nothing left for the next round of DIP financing with the second filing. At that point US Airways was less than a week from liquidation due to a lack cash and available DIP financing. I doubt American will require DIP financing in large part because of that $4 billion in cash.

Think of it this way... let's say that an individual found themselves with a large amount of debt in the form of healthcare bills or credit card bills, but lived in a house with a large amount of equity built-up over time and few other assets. Now someone could take a second against the house, and try to pay down those bills which still might not be enough, and end-up with little, or they could file for bankruptcy, protect the house and the equity in the house and dump the credit card and healthcare bills. American's BK filing was essentially an attempt to protect the cash of the company which is the real wealth of the firm as the debts are far greater than available cash. Unless someone expects to get a huge bonus, much like American would need to see fuel prices drop to a $1/gallon, it is best to stop throwing cash in a futile act to get out of debt and to re-organize through bankruptcy.

As an unrelated sidenote, I find the Tempe boys' interests in other airlines as an odd "trade-up" as if they would be looking to find a better airline. Consider that AW had two relatively low profit margin hubs in LAS and PHX, then merge with an airline that has profitable business hubs like PHL, CLT, and DCA, but the result was to dump LAS, and reduce PHX flying by a significant degree. Now we look at a possible AA merger, and the profitability of LAX, DFW, ORD, JFK, and MIA hubs, and I could see another "trade-up" and dumping or reduced flying. This tactic achieves two objectives: 1) reduces seats by removing competition, 2) it allows US to obtain even more profitable hubs. With that in mind, I would suggest PHX and CLT would see reduced flying (especially international), while PHL would have less international flying in favor of JFK.

So Forecasts Jester.

 

[700UW]

I think you have missed something! The merger has been completed..Final contracts missing between only two groups doesnt dictate a failed merger lol .and Doug addressed "last week in Charlotte" the financing for a potential merger with anyone ....If it makes "cents" financing is not a big deal! Lets make sure facts stay in play here

If the merger was completed there would be no east and west metal, it would all be US Airways. The fact that there is not a combined pilot group and fa group shows the merger is not complete, and it costs extra money to still have to separate airlines flying.

Look at DL and NW, merger after US and HP and they are one pilot group.

Educate yourself.

 

[Travelpro72]

The last I heard former NW and real DL crews still don't fly together on the same airplane.

 

[LD3]

700 , you know better than that . You know DP will get all the financing he needs . I always respect your post but this one just sounded like every other person saying " They can't even complete there own merger and they are trying to merge again . " if I had a penny for every time i heard that .. Well, you know the rest . Have a great holiday .

With all due respect etops, I think 700 really meant, "how many threads do we need"...This is the 5th one that has to do with a possible merger...One started with the OP linking to an article stating the DP is all for consolidation, that is old news but yet people are running with it and still starting new threads...Kinda makes you wonder why AA employees want nothing to do with US..everyone is obsessed with this crap..

 

[700UW]

Pilots do.

 

[Travelpro72]

All I'm saying is look at the total number of f/a's vs. pilots both at US and at the new DL. F/a's not flying together and not on a single contract is no sweat off the companies back. Hell at US they are saving money with the f/a's seperate. They know it.

 

[Glucose Intolerant]

The last I heard former NW and real DL crews still don't fly together on the same airplane.

Supposedly next spring.

 

[damajagua]

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