Leaseback Agreement

[Hopeful]

Be nice to know the terms of the agreement.



http://finance.yahoo.com/news/AerCap-Enters-into-prnews-1968258089.html?x=0&.v=1

 

[FWAAA]

Be nice to know the terms of the agreement.

http://finance.yahoo.com/news/AerCap-Enters-into-prnews-1968258089.html?x=0&.v=1

Why? Are you planning to finance the purchase of some new 738s? 😀

I suspect that the terms are not substantially different from the terms of all of AA's other sale/leaseback transactions of the past few years used to finance the delivery of other new planes.

 

[DallasConehead]

I believe a leaseback agreement work like this: AA places the orders, AA finds someone with money to buy the planes, AA leases the airplanes back from them.

 

[Hopeful]

Why? Are you planning to finance the purchase of some new 738s? 😀

I suspect that the terms are not substantially different from the terms of all of AA's other sale/leaseback transactions of the past few years used to finance the delivery of other new planes.

Have you always been pompous and arrogant?

I can't inquire as to what the terms of the deal are?????

But it's ok for the company to post my salary and benefits on AANEGOTIATIONS.COM for the enitire world to see......but I can't ask a simple question about a lease deal?????????????

Typical AArogance!

 

[Hopeful]

I believe a leaseback agreement work like this: AA places the orders, AA finds someone with money to buy the planes, AA leases the airplanes back from them.

DC, I understand what it is..I am just curious as to what was paid and what the lease back rate is...

I guess, according to FWAAA, I am a lowlife peon worker and don't have the right to ask questions that matter only to important people. And lowlife workers such as myself could not possibly grasp all the BIG BOY FINANCE STUFF BECAUSE THAT IS ONLY FOR THE MASTERS OF THE UNIVERSE TO KNOW...

 

[Frank Szabo]

DC, I understand what it is..I am just curious as to what was paid and what the lease back rate is...

I guess, according to FWAAA, I am a lowlife peon worker and don't have the right to ask questions that matter only to important people. And lowlife workers such as myself could not possibly grasp all the BIG BOY FINANCE STUFF BECAUSE THAT IS ONLY FOR THE MASTERS OF THE UNIVERSE TO KNOW...

I kinda like being a lowlife peon - not that much to remember and certainly not so many asses to kiss to keep my job.

It works this way: AA acquires an aircraft for (examples ONLY) a discounted price of $5.00 from Boeing and immediately turns around and sells the aircraft to a leasing company for the "market" value of, say $10, pockets the $5.00 per aircraft "profit" and flies the hell out of said aircraft while making lease payments then claims poverty with regard to paying its employees.

Do this with 200+ aircraft and the "per" value being $2-$5 million (or perhaps more) and you can see the incentive. A sale/leaseback is a profit generator for the company.

 

[star power]

It appears that AMR has implemented the first phase usage of the backstop agreement with Boeing on the current order for 35 Boeing 737-800 that was stated back in the July 21, 2010 AA.COM press release as the undisclosed backstop agreement terms with Boeing. AMR appears to be using Boeing's full faith credit power from the Boeing backstop agreement in the AMR/AerCap sale/leaseback agreement on the current on going agreement with AerCap. With AMR on going talks with Boeing concerning possible aircraft orders in the near future it appears Boeing will have a workout with the leasing companies and financial companies. If AMR stay in Boeing's backyard with any new orders the final backstop will be Boeing Capital Corporation BCC and possible GE through GECAS because of the CFM56 engine or both BCC and GE combined.

 

[Jacobin777]

It appears that AMR has implemented the first phase usage of the backstop agreement with Boeing on the current order for 35 Boeing 737-800 that was stated back in the July 21, 2010 AA.COM press release as the undisclosed backstop agreement terms with Boeing. AMR appears to be using Boeing's full faith credit power from the Boeing backstop agreement in the AMR/AerCap sale/leaseback agreement on the current on going agreement with AerCap. With AMR on going talks with Boeing concerning possible aircraft orders in the near future it appears Boeing will have a workout with the leasing companies and financial companies. If AMR stay in Boeing's backyard with any new orders the final backstop will be Boeing Capital Corporation BCC and possible GE through GECAS because of the CFM56 engine or both BCC and GE combined.

At the end of the day, I think this is what the "deciding factor" for AA will be in choosing which manufacturer to go with - i.e. financing. I think Boeing will "pull out all stops" for AA which I don't think it would do for UA or DL...total conjecture and IMHO.. :mellow:

 

[FWAAA]

Have you always been pompous and arrogant?

I can't inquire as to what the terms of the deal are?????

But it's ok for the company to post my salary and benefits on AANEGOTIATIONS.COM for the enitire world to see......but I can't ask a simple question about a lease deal?????????????

Typical AArogance!

I guess, according to FWAAA, I am a lowlife peon worker and don't have the right to ask questions that matter only to important people. And lowlife workers such as myself could not possibly grasp all the BIG BOY FINANCE STUFF BECAUSE THAT IS ONLY FOR THE MASTERS OF THE UNIVERSE TO KNOW...

You know, Hopeful, I rarely tell people that they might want to seek anger management treatment, but your responses to my lighthearted reply convince me that you could probably benefit. Anyway, better for you to unleash your pent-up rage here and direct it at me rather than take it home and kick your dog (or worse). Glad to be of help.

Back to the topic:

All of us curious types would love to know the terms, of course, but I assumed that you know that neither AA nor leasing companies are going to tell us, just like AA and Boeing keep their purchase prices a closely guarded secret. Besides, I'm fairly confident that neither you nor me are competent to tell whether AA is getting a good deal even if AA did spell out the terms for us. All the leasing company is doing is loaning AA a few hundred million (perhaps even a billion) dollars and structuring the deal as a lease rather than a purchase and lien with notes and mortgages. Thing is, AA tells us about its borrowings (rates, terms, etc) in its SEC-mandated disclosures but doesn't have to be as explicit in describing its lease agreements.

Implicit in your post (as is often the case with many of the topics you begin) is the assumption that these lease agreements are made possible by your continuing concessions. Your subsequent posts in this thread confirm that was your real argument. As I've posted before, I don't see any connection between the new planes and your low wages. In fact, new fuel efficient planes might represent the best chance you have at getting future raises, as they will limit the amount of money handed over to the oil companies. Oil prices have moderated some in recent days, but are still around $95/bbl this afternoon.

I don't expect you to read every one of my posts and memorize my positions, but I've posted dozens of times before that I agree that you and other line mechanics (most of whom are in high-cost-of-living cities) deserve substantially more money than you're currently making. Thing is, no airline in the USA is paying its heavy overhaul mechanics the wages paid to UPS, FedEx or WN AMTs, and I'm certain that Arpey isn't going to make AA the first to do so. So what do you do to fix the problem? Unhitch yourself from your low-cost-of-living union "brothers" who live in Tulsa snd Fort Worth and let them sink or swim on their own merits and then put the screws to the company. Replace the worthless union and your current negotiators with professionals and set them about negotiating your new contract.

About the terms of the leases agreements: Given how miserly (even niggardly) AA has been with its three major workgroups, I have to assume that it is just as frugal when it comes to paying for its new fuel efficient assets. I don't have to read the leases to safely assume that AA is getting the best terms it can, which are probably as good a deal as any airline is getting. I assume that your will, as aways, disagree, as will a certain DL cheerleader (he'll be along shortly to tell me that he knows how much AA pays on its leases and that AA is getting the worst terms of any airline and will soon file for Ch 11 because it can't compete with DL).

 

[FrequentFlierCA]

You blew that one, Hopeful. Talk about totally misreading the tone of his reply. :blink:

And if you don't want your salary known for all the world to see then collective bargaining isn't for you.

 

[eolesen]

From what I remember, AA essentially has a most-favored-customer clause (which I'm sure other all-Boeing customers have as well). That's going to drive a pretty good deal for AA already.

And yes, I'm sure this will turn into "Six Degrees to Delta is Perfect" in no time, but I'm done playing that game...

 

[Hopeful]

You know, Hopeful, I rarely tell people that they might want to seek anger management treatment, but your responses to my lighthearted reply convince me that you could probably benefit. Anyway, better for you to unleash your pent-up rage here and direct it at me rather than take it home and kick your dog (or worse). Glad to be of help.

So now you have a degree in Psychology I see. It's amazing how you could conclude I am so angry that i would kick a dog, or in your words, "worse" merely by my post.
I guess you conveniently forgot your wise ass remark when I stated i would like to have seen the details of the leaseback agreement.

Why? Are you planning to finance the purchase of some new 738s?

I suspect that the terms are not substantially different from the terms of all of AA's other sale/leaseback transactions of the past few years used to finance the delivery of other new planes.

I tell you what, FWAAA, pretend I am one of your associates who post here had asked you the question instead of a union guy...

Just tell me how much the aircraft are being purchased for and how much the leasback is? Spare me all the other meaningless info..

HOW MUCH IS THE PURCHASE PRICE AND HOW MUCH IS THE LEASE BACK?



Is that too much to ask?

 

[Hopeful]

You blew that one, Hopeful. Talk about totally misreading the tone of his reply. :blink:

And if you don't want your salary known for all the world to see then collective bargaining isn't for you.

Ah, FWAAA's patron saint to the rescue.

Nice try, I blew nothing. He was being a typical wise ass.
It seems, you and he have all the facts about everything, but neither you or he could tell me the purchase price of the aircraft and what AA's leaseback cost is.....That's all I ask...

As for the collective bargaining process being the cause of my salary and benefits being made public....I guess a CEO has the most lucrative collective bargaining system known to man...since his/her entire compensation is also public knowledge..

You too misread MY post.....Since it is prefectly ok to post employees salaries as public record....then why not the numbers of a "normal business dealing such as leaseback?

Since it is such a normal mondane transaction, why not post the numbers?

 

[FWAAA]

So now you have a degree in Psychology I see. It's amazing how you could conclude I am so angry that i would kick a dog, or in your words, "worse" merely by my post.
I guess you conveniently forgot your wise ass remark when I stated i would like to have seen the details of the leaseback agreement.

I tell you what, FWAAA, pretend I am one of your associates who post here had asked you the question instead of a union guy...

Just tell me how much the aircraft are being purchased for and how much the leasback is? Spare me all the other meaningless info..

HOW MUCH IS THE PURCHASE PRICE AND HOW MUCH IS THE LEASE BACK?

Is that too much to ask?

Answer hasn't changed since earlier today:

All of us curious types would love to know the terms, of course, but I assumed that you know that neither AA nor leasing companies are going to tell us, just like AA and Boeing keep their purchase prices a closely guarded secret. Besides, I'm fairly confident that neither you nor me are competent to tell whether AA is getting a good deal even if AA did spell out the terms for us. All the leasing company is doing is loaning AA a few hundred million (perhaps even a billion) dollars and structuring the deal as a lease rather than a purchase and lien with notes and mortgages. Thing is, AA tells us about its borrowings (rates, terms, etc) in its SEC-mandated disclosures but doesn't have to be as explicit in describing its lease agreements.

I apologize, Hopeful. I keep assuming that you're aware of the fact that NOBODY HERE KNOWS THE ANSWERS YOU SEEK.

That's why I posted the tongue-in-cheek response last week.

I don't know exactly how much AA pays for each new 738. I don't know how much money these lessors are willing to loan AA on each new 738. Those numbers are secret, and neither AA nor Boeing is compelled by any government agency to tell you the numbers. I don't know the numbers.

Anyway, the details don't affect your compensation any more than the phase of the moon affects your pay. You can thank your impotent worthless union for your low wage predicament.

Yes, it would be nice to be able to read all about these leases, but to be able to do that, you'd have to be in the know at AA or Boeing or the leasing companies, and neither of us are in the know. Nobody who posts here is in the know.

 

[Hopeful]

Answer hasn't changed since earlier today:



I apologize, Hopeful. I keep assuming that you're aware of the fact that NOBODY HERE KNOWS THE ANSWERS YOU SEEK.

That's why I posted the tongue-in-cheek response last week.

I don't know exactly how much AA pays for each new 738. I don't know how much money these lessors are willing to loan AA on each new 738. Those numbers are secret, and neither AA nor Boeing is compelled by any government agency to tell you the numbers. I don't know the numbers.

Anyway, the details don't affect your compensation any more than the phase of the moon affects your pay. You can thank your impotent worthless union for your low wage predicament.

Yes, it would be nice to be able to read all about these leases, but to be able to do that, you'd have to be in the know at AA or Boeing or the leasing companies, and neither of us are in the know. Nobody who posts here is in the know.

No, I am not aware.....posters like you, eolesen, and even FFCA, at times post with factual data on subjects related to the company...I figured someone in the know would give some numbers.
FWAAA, believe it or not...my original post on this topic was NOT of a sarcastic nor cynical nature...I am curious to know, first of all, the purchase price of the aircraft...which, by the way, Boeing never gives an exact quote...Secondly, the price AA leases them back for....that was all I was asking,,,,even though I did say i would like to see the details which, one might assume, is the whole package. You know the saying..."CAN'T HURT TO ASK."

I have no interest in the legaleze of the contract.....just the two prices negotiated.

Also, where in my original post did I equate this deal to MY wage predicament? As a matter of fact, I do not recall criticizing the company for buying aircraft.

Lastly, as for my worthless union representation, you are preaching to the choir....The problem is, there are an equal, if not greater number of mechanics satisified with this company union..There reasons could be because of their pay in relation to their geographical location....