Twu $620 Million In Concessions

[Decision 2004]

Once again proof that Bankruptcy probably wasn't really as close at AA Management claimed. AA has burned nearly twice the concession dollars given by the TWU in fuel alone, and yet we are not on "steps of Bankruptcy". How much profit was AA planning on our backs if fuel had not risen?

I think it pretty clear that between exposed, yet hidden management retention bonuses and the fuel price burn rate, that AA likely was not really as close as they claimed to Bankruptcy.

American Airlines Raises Fares
Wednesday September 22, 4:42 pm ET
American Airlines Raises Most of Its Fares Within North America, Blaming Higher Jet Fuel Costs


FORT WORTH, Texas (AP) -- American Airlines, blaming higher jet fuel costs, said Wednesday it was immediately raising most of its fares within North America $5 one way and $10 on round trips.
The move by American, the largest U.S. carrier, was the latest in a series of attempts by carriers to raise prices, often blaming the increases on rising fuel costs.

American said Wednesday that at current oil prices, its spending on fuel this year would rise by more than $1 billion over the $2.77 billion it spent last year.

That would be an increase of about $300 million in the airline's last projection, made in July.

American's parent, Fort Worth-based AMR Corp., has lost more than $6.7 billion since the beginning of 2001.

In the April-June period of this year, the company reported a $6 million profit. Fuel costs in those three months rose to $917 million from $647 million a year earlier, due to a 34 percent jump in the price of fuel and a 4.8 percent increase in fuel consumption.

American said every 1-cent increase in the price of a gallon of jet fuel costs it more than $30 million a year. American operates 748 jets, and its American Eagle commuter airline has 278 others, mostly smaller regional jets.

AMR shares closed down 26 cents, or 2.9 percent, at $8.74 Wednesday in trading on the New York Stock Exchange.

 

[air_guy]

Once again proof that Bankruptcy probably wasn't really as close at AA Management claimed. AA has burned nearly twice the concession dollars given by the TWU in fuel alone, and yet we are not on "steps of Bankruptcy". How much profit was AA planning on our backs if fuel had not risen?

I think it pretty clear that between exposed, yet hidden management retention bonuses and the fuel price burn rate, that AA was really as close as they claimed to Bankruptcy.

American Airlines Raises Fares
Wednesday September 22, 4:42 pm ET
American Airlines Raises Most of Its Fares Within North America, Blaming Higher Jet Fuel Costs
FORT WORTH, Texas (AP) -- American Airlines, blaming higher jet fuel costs, said Wednesday it was immediately raising most of its fares within North America $5 one way and $10 on round trips.
The move by American, the largest U.S. carrier, was the latest in a series of attempts by carriers to raise prices, often blaming the increases on rising fuel costs.

American said Wednesday that at current oil prices, its spending on fuel this year would rise by more than $1 billion over the $2.77 billion it spent last year.

That would be an increase of about $300 million in the airline's last projection, made in July.

American's parent, Fort Worth-based AMR Corp., has lost more than $6.7 billion since the beginning of 2001.

In the April-June period of this year, the company reported a $6 million profit. Fuel costs in those three months rose to $917 million from $647 million a year earlier, due to a 34 percent jump in the price of fuel and a 4.8 percent increase in fuel consumption.

American said every 1-cent increase in the price of a gallon of jet fuel costs it more than $30 million a year. American operates 748 jets, and its American Eagle commuter airline has 278 others, mostly smaller regional jets.

AMR shares closed down 26 cents, or 2.9 percent, at $8.74 Wednesday in trading on the New York Stock Exchange.

[post="183142"][/post]​

Let me help you with the math. After our restructuring we were able to borrow additional 2B .... yes 2B from the banks. We were able to get that because it seemed then that with our restructuring were going to be capable of paying back. Guess where is that money now ...... almost gone because of fuel costs. Since you like to follow financial news keep an eye on our third and fourth quarter results and you will find that without the fuel cost increase we would be posting a very modest profit which was the intent all along. Of course I may be wasting my time explainig this to you since you have an agenda and will manipulate any news to get the effect you want, but at least others that may be misled by your comments, at least can read a different perspective. If what you really want is the truth and you make those comments out of anger, frustation or lack of knowlege I'll be happy to share some more insights of our financial performance.

air_guy

 

[FWAAA]

Let me help you with the math. After our restructuring we were able to borrow additional 2B .... yes 2B from the banks. We were able to get that because it seemed then that with our restructuring were going to be capable of paying back. Guess where is that money now ...... almost gone because of fuel costs. Since you like to follow financial news keep an eye on our third and fourth quarter results and you will find that without the fuel cost increase we would be posting a very modest profit which was the intent all along. Of course I may be wasting my time explainig this to you since you have an agenda and will manipulate any news to get the effect you want, but at least others that may be misled by your comments, at least can read a different perspective. If what you really want is the truth and you make those comments out of anger, frustation or lack of knowlege I'll be happy to share some more insights of our financial performance.

air_guy

[post="183153"][/post]​

I agree. I have posted similar explanations to Dave's concerns about fuel prices and their relationship to the massive concessions, but to no avail. He must forget that the TWU only contributes a little more than one third of the total annual savings from the concessions. As you demonstrate, he ignores the massive borrowing by AMR in 2003-04 that was made possible only because the employees suffered.

Additionally, he ignores the improvements in revenue: 2004 should see $2 billion more in revenue (at least) than 2002. That alone goes a long way toward paying for fuel.

Lastly, since AMR has burned over $6 billion in cash from 2001-2003, there is nothing sinister about the size of AMR's hoped-for profits. After all, the debt has to be paid back, and it's obvious that it will be paid on the backs of those least able to afford it: The TWU represented employees.

His theme appears to be that with fuel going thru the roof, AMR should be filing for Ch 11 despite the $1.8 billion in concessions. I just don't get it.

 

[PRINCESS KIDAGAKASH]

Hey everybody punch "FWAAA" into your web browser. You might be suprised at what comes up! FWAAA, you are one weird person. As my father would say, "YOU'RE NOT PULLIN A FULL TRAIN".

 

[FWAAA]

Hey everybody punch "FWAAA" into your web browser. You might be suprised at what comes up! FWAAA, you are one weird person. As my father would say, "YOU'RE NOT PULLIN A FULL TRAIN".

[post="183165"][/post]​

😀

Different FWAAA. FWAAA.com is not me.

http://www.networksolutions.com/en_US/whoi...equestid=359970

But looks like I have a fan. B)

By the way, I punched Princess Kidagakash into my browser, and the results looked a lot like kitty porn. :down:

 

[air_guy]

Lastly, since AMR has burned over $6 billion in cash from 2001-2003, there is nothing sinister about the size of AMR's hoped-for profits. After all, the debt has to be paid back, and it's obvious that it will be paid on the backs of those least able to afford it: The TWU represented employees.

[post="183156"][/post]​

Well if I recall correctly the 'sinister' profits planned for 2004 post restructuring were in the neigborhood of 200 million. I took the time to read some of your old posts and I figured its not going to make a big difference anything you, I or anyone else explain to them. They have an agenda to keep employees upset (specialy the TWU) to support their AMFA thing. So they will take any news and manipulate them in any way to get what they want. It is sad because from prior dicussions it seems to me that that they are smart people but are doing this on purpose just to support their cause. The end does not justify the means and sooner of later they will have to face the consequences of their actions.

 

[Decision 2004]

Let me help you with the math. After our restructuring we were able to borrow additional 2B .... yes 2B from the banks. We were able to get that because it seemed then that with our restructuring were going to be capable of paying back. Guess where is that money now ...... almost gone because of fuel costs. Since you like to follow financial news keep an eye on our third and fourth quarter results and you will find that without the fuel cost increase we would be posting a very modest profit which was the intent all along. Of course I may be wasting my time explainig this to you since you have an agenda and will manipulate any news to get the effect you want, but at least others that may be misled by your comments, at least can read a different perspective. If what you really want is the truth and you make those comments out of anger, frustation or lack of knowlege I'll be happy to share some more insights of our financial performance.

air_guy

[post="183153"][/post]​

My point is this...

If as you say the "borrowed" money is nearly gone. Then why isn't AA right back in the BK position?

I never profess to be a math expert, but if you have a loan, that still has to be paid back with interest, and you have spent that loan, then why are you not still broke and sending the lawyers back to the "steps"?

I am not "manipulating" anything. I am simply pointing out that AA's bottom line appears to be a stagnated no gainer, and in fact, appears to be in desperate need of a ticket increase which after several attempts has not stuck in the industry to date.

Of course there is somehow still 50 million plus for advertising.

I think my point is, that just because Carty left doesn't mean I blindly follow and trust Arpey. He was one of the players and/or approvers of the 46 Serp Team. And just because Arpey and the Union Leaders are now a "team" doesn't the membership of the unions are with them.

I notice you use terms like "seemed we could pay it back"
and without fuel "would be posting a profit". Those are not comments to bank on now are they?

 

[Decision 2004]

AMR hires bankers to restructure loan
By Matt Andrejczak, CBS.MarketWatch.com
Last Update: 7:04 PM ET Sept. 22, 2004

SAN FRANCISCO (CBS.MW) -- The parent company of American Airlines is working with its bankers to refinance its bank credit, according to a regulatory filing late Wednesday.

AMR (AMR: news, chart, profile) said it is fully drawn on its $834 million credit facility and "might not be able to comply" with one of the covenants in the loan, due to record-high fuel prices and a weak industry environment.

Based in Fort Worth, Texas, AMR has hired Citigroup Global Markets and JPMorgan Chase to restructure the loan before the end of the year. The credit facility expires December 31, 2005, and is secured by aircraft.

"While American believes that it will be able to obtain the replacement facility on acceptable terms, there can be no assurance that American will be able to do so," the company said in the filing.

The parent of the world's largest airline said it restructured two covenants tied to the loan on Wednesday, but is concerned it might default on one of those next year. The covenant in question requires AMR to maintain a specific ratio of earnings, before excluding items, to fixed charges. (The excluding items are interest, taxes, depreciation, amortization and rentals, adjusted for certain noncash items.)

Company spokesman Tim Wagner said it is making its regularly scheduled payments on the credit facility and still plans to do so.

In Wednesday's filing, AMR added that it expects to end the quarter with total cash and short-term investments of $3.6 billion.

American warned last month that surging fuel costs would likely force it to slash its third-quarter and full-year outlook. As it stands now, AMR's full-year fuel bill will be $3.8 billion, about 40 percent higher than last year.

Shares of AMR closed Wednesday at $8.74, down 26 cents.

 

[Decision 2004]

So why sepnd 50 plus Million on Advertisment at the same time you are potentially failing to meet earnings covenents on loans?

Stupid is as Stupid does.

 

[air_guy]

My point is this...

If as you say the "borrowed" money is nearly gone. Then why isn't AA right back in the BK position?

I never profess to be a math expert, but if you have a loan, that still has to be paid back with interest, and you have spent that loan, then why are you not still broke and sending the lawyers back to the "steps"?

I am not "manipulating" anything. I am simply point out that AA bottom line appeats to be a stagnated no gainer, and in fact, appears to be in desperate need of a ticket increase which after several attempts has not stuck in the industry to date.

Of course there is somehow still 50 million plus for advertising.

I think my point is, that just because Carty left doesn't mean I blindlt follow and trust the Arpey. He was one of the 46 Serp Team.

[post="183215"][/post]​

Well here is an indication on how bad things are right now

http://www.marketwatch.com/news/yhoo/story...CBAA328A409F%7D

I agree with how things have stagnated or gotten worse but your original post says that we lied in the amounts needed, based on your math, to profit from it, which is not true. I helped with the restructuring model and your comments are not only innacurate but I find them to some degree offending. I can't vouch for anything you may have expericenced before in AA's history but what we did in 02/03 was solid, but unfortunately missed the fuel price issue that we are seeing today. Now even if we had baked a cushion for fuel, first labor unrest would have been much worse, enough to send us to BK, or if it had not gone up, we would have been accused of being liars... which you alreday did by the way, so really we did not have a lot of choices.
Now lets pray that fuel comes down or some airlines start folding otherwise things are going to get ugly pretty soon (I don't have any desire to see OA employees on the street, but it rather be them than us, the industry can not support the current level of capacity). By the way I am 100% sure that if we start using the B word again people are going to start jumping accusing management of incompetence, etc, etc. Management is not the enemy .... LCCs are, so why don't you focus your efforts against them not our own employer. Fuel prices are our enemy, have you writte to your congressman asking for some action to stop specualtion in the oil markets? It seems to me that those things are not important to you ... organizing AMFA seems to be your priority and that is fine, that is your right, but don't attempt to gain votes by putting the workers against the company with false statements... you may get what you want but it may backfire, You may succeed in getting your AMFA certified just to find that there is no employer to bargain with. Keep your cause clean.

By the way we spend a lot more than 50mill a year in advertising, and this campaign just replaces other efforts. If we do not advertise we don't sell. It may not sound as important as fuel and it may not be ... I don't need ads to fly the airplane ...but you need them to have passengers on it.

Finally I think you don't have to trust blindly anyone even if they have been good to you because you never know ... they may stab you when you least expect it. I recognize that the SERP actions screw things up and I personally felt betrayed but I moved on, there is a greater good, keeping the company afloat. You can ask any accountant or advisor that understands better financial statements to explain the current situation of the company before you post... that is publicly available information. You don't need to trust anyone.

Peace,

air_guy

 

[limit]

Can anyone provide specific information in regards to the company’s borrowed money?
May 2003 to present.
Provide amounts and financial institutions if you please.

 

[Nightwatch]

air_guy...welcome to our nightmare..and be prepared for Stewart's negative agenda. His past life was telephone operator for 911 suicide hotline...HAHAHA!

 

[air_guy]

Can anyone provide specific information in regards to the company’s borrowed money?
May 2003 to present.
Provide amounts and financial institutions if you please.

[post="183253"][/post]​

I don't think that level of detail is available but if you go to www.sec.gov you can find the 10Q (Quarterly reports) and 10K (yearly reports) and read the cash flow statement. There is some detail on the debt instrumetns but no specific financial institution. Most of these are bonds that get sold to a wide range of investors.

For what I can see:

2003: 945
June 2004: 836
Total 1,781

We could not borrow in early 2003 because of our precarius financial condition.

I believe we continued to borrow for this quarter where is expected that we loose money despite 3Q being tipically our strongest quarter.

 

[TIME FOR CHANGE]

If what you really want is the truth and you make those comments out of anger, frustation or lack of knowlege I'll be happy to share some more insights of our financial performance.

Well if you are the all knowing. Tell me what part of the turnaround plan is making this sinking ship stay a float.

the only thing I see is massive concessions nothing else. It is the same airline it was a year ago nothing has changed. Business as useual. Liquidation is inevitable

 

[air_guy]

Well if you are the all knowing. Tell me what part of the turnaround plan is making this sinking ship stay a float.

the only thing I see is massive concessions nothing else. It is the same airline it was a year ago nothing has changed. Business as useual. Liquidation is inevitable

[post="183544"][/post]​

I am not the all knowing. But what I know (which is not a lot) is better than knowing nothing, or worse yet making stuff up of press releases to irritate the workforce.
The T/A plan did not contemplate fuel at $48 so right now what keeps us afloat are all the efforts made in 2002 and 2003 that have us bleeding, but less than our competitors even the bankrupt ones. As I said before the plan we had was solid ...well almost, but unfortunatelly the are events that no one can forecast... otherwise I'll be playing the lottery not working 50 hours a week.