Is bankruptcy the only way out for AA?

MileHighGuy

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Oct 14, 2002
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[P]Is bankruptcy the only way out? Is it being considered by Carty? Will the mighty AA go under in order to get out of the union contracts and pay scales?[/P]
[P]I know people within AA who swear that it''s just a matter of time before they (AA) file for bankruptcy protection. Personally, I don''t think it''s going to happen. But who knows? It would give Carty a way out of the union mess. Time will tell.[/P]
 
A

ART

Guest
The Bewitching hours approach. . . .(not to mention nearly the highest underfunded pension in the world)
...
Another to ponder - What would Carty need the APFA for if BK was on the horizon. After all he is the one who provided his
testimony under oath.
.
John Ward . . . . hide your money . . start your engine and leave FAST. . . unless there are strange bedfellows to consider on
high ¿?
.
As always, gavel in hand . . .or maybe two . .
ART
 

QQ3270

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Aug 20, 2002
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Hey art it wasnt John thAT YOU ARE SUING ITS ALL F/AS AT AA WE MADE THE DECISION TO STAPPLE
 
Aug 20, 2002
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IMHO, the following will happen,
UAL will NOT enter BK court, because the majority owners(the employees)will face a double whammy, if they do.
First,in BK, they lose there stock(Which could be valuable in the future), and if the employees dont come up with concessions, then they face the Grave Uncertainties that BK would bring.
Net result, the unions will reach a deal on concessions REAL SOON !!!!!!!

Which brings us to AA.

Without UA, or even DL in BK court, AA would have a somewhat difficult time convinceing the FEDS that they are Totally Broke.
Net result,
AA is'nt going to have the oppertunity to see the inside of a BK court.(IMHO, I really don't think DC wants to go into BK)

We always hear that You can't shrink to profitability. Well during Normal Times that very well may have been the case.
BUT,
guess what ?????
We are NOT in Normal times. Therefore, ANYTHING GOES
I think that(to a certain extent) AA can shrink to profitability, even if it means losing the #1 position of being the biggest airline.
Lets not forget that when Crandall first came onboard, he put AA on a large Slim Fast program !! (The rest, is history) !!!!!!!!!!

NH/BB's
 
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M

MileHighGuy

Member
Oct 14, 2002
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[P]I just got off an AA flight. The F/O told me before we boarded the flight; that his union rep told him that Carty has [STRONG]not[/STRONG] ruled out the possibility of a bankruptcy filing. It will depend on UA filing first. [/P]
[P]Stay tuned boys and girls, it's going to be one bumpy ride!!! [/P]
 

xsqueezeme

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Sep 8, 2002
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that's the trouble with these ex-twa people, they want everything the way it was when twa was flying...they're not use to working without the doom and gloom factor and the fear of bankruptcy looming over their heads. it's just like a security blanket for them...therefore lawsuits, bankruptcies, layoffs, and general animosity prevails...it's the only climate they can work in to feel confortable.
 

Bob Owens

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Sep 9, 2002
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Mile High Guy;
What would you expect Carty to say to the pilots? No our finances are very sound but we just dont feel like giving you guys a raise.
The pilots are still without a contract.
 

Bob Owens

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Sep 9, 2002
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Bankruptcy?
Well they just said that they have 2.8Billion in cash and a few more billion in current assetts.
I wont say never, it just depends on how long the downturn actually lasts and what happens at United.
Just like wives the employees will be the last to know. The last downturn was over by 94 but the airlines continued to gain concessionary contracts through 95.
 

FibberMcGee

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Aug 20, 2002
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[blockquote]
----------------
On 10/20/2002 5:56:33 PM xsqueezeme wrote:

that's the trouble with these ex-twa people, they want everything the way it was when twa was flying...they're not use to working without the doom and gloom factor and the fear of bankruptcy looming over their heads. it's just like a security blanket for them...therefore lawsuits, bankruptcies, layoffs, and general animosity prevails...it's the only climate they can work in to feel confortable.
----------------
[/blockquote]

What an idiotic statement. The feeling of job security lasted a whopping 3 months. I was one that was fortunate enough to remain at my job and stay full time. That did not happen in most cases. The animosity comes more from the AA side than the TWA side in my experience. A lot of you seem to blame the workforce for TWA's financial problems but it seems to me it was the workforce did their job day after day with what they had and did an excellant job. Did the TWA people get used having to deal with the lack of job security? In a wierd way, I suppose so, but that doesn't mean we enjoyed it. It is also amazing how some of you Native Americans lump all of TWAers into one disgruntled litigous group. Some of you folks, on both sides, really need to move on...its over...TWA is part of AA...learn to work together and stop the foolish bickering. And before the reply comes to then stop the lawsuits, I am not suing anyone. Good luck to us ALL!
 
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MileHighGuy

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Oct 14, 2002
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[P]
[BLOCKQUOTE][BR]----------------[BR]On 10/21/2002 9:22:22 AM Bob Owens wrote:
[P]Mile High Guy;[BR]What would you expect Carty to say to the pilots? No our finances are very sound but we just dont feel like giving you guys a raise. [BR]The pilots are still without a contract.[/P]----------------[/BLOCKQUOTE]
[P]No not exactly Bob. How about something along the following lines:[/P]
[P]Gee Pilot Guys and Girls, you [STRONG][FONT face=System]already[/FONT][/STRONG] make a lot of money. Since we're bleeding cash left and right, why not take a 15% pay cut? You would still be able to afford the fancy homes and cars. Plus, you would still have jobs. Are you willing too help out your company in a time of need? [/P]
[P]That would be a nice and reasonable approach. What do you think?[/P]
[P]Let me guess; you think AA pilots are underpaid and are all on the verge of collecting food stamps & welfare benefits? So what if they don't have a contract? It's not like they are working for free! [STRONG]Give me a break![/STRONG][/P]
7.gif']
 

AirplaneFan

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Aug 20, 2002
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[P]
[BLOCKQUOTE][BR]----------------[BR]On 10/21/2002 9:17:52 AM Bob Owens wrote:
[P]Bankruptcy? [BR]Well they just said that they have 2.8Billion in cash and a few more billion in current assetts. [BR]I wont say never, it just depends on how long the downturn actually lasts and what happens at United. [BR]Just like wives the employees will be the last to know. The last downturn was over by 94 but the airlines continued to gain concessionary contracts through 95.[BR][BR][/P]
[P]----------------[/P]
[P]Some of you guys are amazing.... Let's look at this point.[/P]
[P]1) AA has 2.8B in cash (I'll take your word for it, since it seems the pilot must call the bank every morning to find out). But how much debt do they HAVE? They have an underfunded pension fund of over $3B. They reported a loss of over $900M in 3Q. One can declare bankruptcy with cash in the bank if the liabilities exceed assets. But you guys keep stating a bank balance as if inocculates you from the very troubling news.[/P]
[P]2) But AA employees haven't given any concessions to date. In fact, the aggrieved pilots a few months ago were picketing airports looking for a large pay increase.[/P]
[P] [/P][/BLOCKQUOTE]
 

FA Mikey

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Aug 19, 2002
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airplanefan says:
1) AA has 2.8B in cash (I'll take your word for it, since it seems the pilot must call the bank every morning to find out). But how much debt do they HAVE? They have an underfunded pension fund of over $3B. They reported a loss of over $900M in 3Q. One can declare bankruptcy with cash in the bank if the liabilities exceed assets. But you guys keep stating a bank balance as if inocculates you from the very troubling news.



Mike says:
From AA press release: It's really an accounting issue. Our pension fund is fine, said Al Becker. We are well within all the minimum funding requirements for the pension fund.

The minimum pension liability is simply a reflection of the current conditions in the economy, the fact that markets are down, Becker said. It's an issue most companies will have to address.

Becker AMR has contributed $250 million to its pension funds this year and could pay the minimum liability out of cash -- company officials say they have $2.8 billion in cash and short-term investments.

No one says they can not declare bankruptcy. Point is, AA does not want to. They will run the compnay. Not leave it up to a judge.



airplanefan says:
But AA employees haven't given any concessions to date. In fact, the aggrieved pilots a few months ago were picketing airports looking for a large pay increase.


Mike says:
No we have not given any money back. So far only USAIRWAYS has gone down that road. AA and Don Carty have not asked. They see, there are other ways wee can work together to save this company with out putting it on the backs of its faithfull employees.

The pilots are at the bottom of the payscale right now. They will get a raise in there contract. Even with the percentage the UAL pilots were willing to agree to cut. Its above what the AA guys currently make. The AA guys deserve to make as much as there counter parts at the other carriers.
 

WingNaPrayer

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Aug 20, 2002
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[blockquote]
----------------
On 10/21/2002 4:37:34 PM FA Mikey wrote:

No we have not given any money back. So far only USAIRWAYS has gone down that road. AA and Don Carty have not asked. They see, there are other ways wee can work together to save this company with out putting it on the backs of its faithfull employees.
----------------
[/blockquote]

Please tell me you don't really believe that. There are no such things as faithful employees as far as the upper crust at AMR are concerned, employees are chattel nothing more, nothing less.

If you believe for one moment that your jobs will not become a barganing tool in all this industry mess, then you won't believe it when AA files for chapter 11 and graciously accepts the court's help with holiding it's creditors...and the unions...at bay!

No one wants to address the singlemost reason behind all the industry woes, and that's bad management, pure and simple. When times were good (read: when business travelers were lining up like sheep to a slaughter) management took on a spend-spend-spend attitude and failed to see that with technological advances on the loom, that the fat times weren't going to last forever.

I totally discount 9/11 as any type of factor in the business traveler slump. Simply put, corporate travel finally stood up and said NO. The only thing 9/11 has put a dent in is the leisure traveler which most airline corporates equate to garbage in tow anyway. Pricing isn't going to get anyone back to the airports, a return of civil liberties, even a modest one will go a long way in accomplishing that.

If United goes chapter 11, then AA will have no choice but to follow suit because they sure as he11 won't be able to compete with UA in bankruptcy with their code-share USAir in bankruptcy too. Together UA and USAir would clean up the majority of available travel dollars.

Just like the government waits for the holidays to yank young men from their homes and send them off to play toy soldier for the generals in some third world country, this airline will use the holidays as the perfect time to crap all over their employees in such massive amounts you'd think corporate was eating epsom salts!

Mike...a positive attitude only goes just so far, and you've been fairly upbeat on the board in the face of many negative postings. You're setting yourself up to be one of those that falls the hardest. Ease up on then gung-ho bit...its blocking your ability to read between the lines!

I'm sure many appreciate your attitude of saving the company by working together but you have to face the facts, you can't save the company that you worked for a year ago, those days are gone, and that company, just like the existing one has too many employees, too many managers, too many planes, flies to excessive destinations and will continue to bleed like the Nile until some of it goes. The industry analysts predictions are still pretty close...AA needs to shed 30,000 employees and 300 planes. I'm not able to do the math but I don't know how far back in seniority on the AA side 30,000 employees would go - something like 1991?
 

Bob Owens

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Sep 9, 2002
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There is a point somewhere between Mikey and Wing and a prayer.
If the economy turns around in the next years or so I think AA will be OK. If United files and things dont get better then all bets are off.
Bankruptcy has a lot of negatives. One of the reasons why AA thought that they could make a profit where TWA could not, flying the same routes with the same people and equipment was AAs better credit rating. They were considered less of a risk so they could get better terms on leases and cash. So even though the employees of LLC would be getting raises the company felt that TWA was worth it. If the company goes bankrupt its access to cash and favorable terms on leases will be gone. Savings on the labor front may not be realized, lower morale =lower productivity. So if you pay your employees less and cut their pay you can expect productivity to go down while OT goes up, thereby erasing any real savings. When you lease a 777 it will perform the same regardless of how much or how little you are paying for the lease.Access to favorable leases and lower costs for capital combined with higher productivity may be enough to offset higher hourly labor costs.