What are the Bankreuptcy odds?

capeman

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Aug 30, 2002
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Pretty good odds. Stock was down 18% as of 10:30 am EST. Good buy at $1.50 if you have the guts. My guess is late next week if APA doesn't agree to managements terms.
 

Connected1

Senior
Aug 20, 2002
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On 3/28/2003 10:06:20 AM Winglet wrote:

I think Carty''s intention has been to take the airline into BK all along and I don''t think it matters what the unions do. He just wants an excuse to blame the unions for his own incompetence. After all, putting airlines into bankruptsy is a family tradition with the Cartys. You can bet that Brundage and he will walk away in a year or so with fat bonuses, just like Gangwal, Wolf, et al.
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That''s a flame worthy of a marshmallow roast.
 

Connected1

Senior
Aug 20, 2002
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100% based upon the war''s effects on revenue, and my natural skepticism that a) one of the unions will pull some sort of stunt (for instance, if we get govt. aid, unions may request that the amount of the aid be deducted from their concession targets), or B) if they don''t, at least one of the agreements that gets sent out for membership vote will be turned down.

I would like to think that the company will allow the unions enough time to put contracts up to a vote, which might land a filing on a Monday in late April. However, I could make a case that it is too late to implement concessions (especially pilot workrules, given the training burden) and still avoid BK thanks to the war, and we might consider filing BK early in order to make a better case for federal aid and enhance our liquidity.
 

Winglet

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Aug 20, 2002
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I think Carty''s intention has been to take the airline into BK all along and I don''t think it matters what the unions do. He just wants an excuse to blame the unions for his own incompetence. After all, putting airlines into bankruptsy is a family tradition with the Cartys. You can bet that Brundage and he will walk away in a year or so with fat bonuses, just like Gangwal, Wolf, et al.
 

bicaal

Member
Sep 4, 2002
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I would say that Mr. Carty has already told the unions that it is a done deal. If not, why did John Ward make his faux pas that caused the stock to plummet a couple of weeks ago after the meetings with the unions?
This could be the cloud with the silver lining for the ex-TWA employees though. If all of the employees of AMR bail out due to the current financial crisis, as they have preached over and over that the TWA people should have done, then there will be plenty of job openings for our furloughed employees. Always trying to think of the positive.
 
Aug 20, 2002
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Valhalla
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How thrilling would it be for AA to pull out of this nosedive and avoid Ch11?

You guys are watching other carriers wither away, doesn''t that scene inspire everyone to make AA succeed?

And what competitive moves would Leo Mullin and Gordon try if AA joins the BK crowd?
 

Cosmo

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Aug 20, 2002
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On 3/28/2003 10:41:04 AM whatkindoffreshhell wrote:

And what competitive moves would Leo Mullin and Gordon try if AA joins the BK crowd?
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The best competitive move those two could make would be to have their airlines file for bankruptcy protection as well! And in ol'' Gordo''s case, Continental is just about out of cash, so they will likely be filing right after American anyway.
 

Bear96

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Aug 20, 2002
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It probably just went up even more now that the UAL pilots have a TA (assuming it will be ratified). Now UA can hang around for a few more months keeping the capacity glut in the market before finally liquidating. AA will have to do something drastic to get their labor costs down now that UA is well on the road to doing that.
 

iflyjetz

Senior
Oct 2, 2002
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100%.

For AMR''s sake, it had better be next week. If they don''t, it tells me that they can''t line up sufficient DIP financing. No DIP financing, no chap 11. With the debts payable by AMR this summer, it''d be a trip straight to chap 7. AMR doesn''t have a lot of wiggle room here.
 

Resman1

Member
Aug 29, 2002
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100 percent, I think they will file on Tuesday April 1, 2002. Management may think that most people will think it''s an April Fools Day joke and it won''t hurt as much.
I feel that Carty''s intent is not to "blame" the unions, however, I feel by having all the contracts done prior to
filing Chapter 11 Managment thinks it will be easier to obtain DIP financing. An earlier post hit the nail on the head, if you''re going to go, go now. If you have AA, US, UA all in bankruptcy the financing for DL, NW and CO for their filings will be limited. It very well could be that the last "solvent" airline will be the first to shut it''s doors.
 

iflyjetz

Senior
Oct 2, 2002
422
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On 3/28/2003 3:54:35 PM WXGuesser wrote:

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On 3/28/2003 3:43:24 PM iflyjetz wrote:

NWAC is sitting on a lot of cash; I think that they can ride this one out.

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Weren''t a lot of people saying that about American about six months back?

TANSTAAFL


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AMR did have a lot of cash, but the difference is that AMR''s daily cash burn is huge compared to NWAC.
I think that AMR management has been underplaying the large cash burn rate; TWA''s integration costs alone have been huge.
 

ZMAN777

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Aug 23, 2002
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On 3/28/2003 12:53:33 PM Bear96 wrote:

It probably just went up even more now that the UAL pilots have a TA (assuming it will be ratified). Now UA can hang around for a few more months keeping the capacity glut in the market before finally liquidating. AA will have to do something drastic to get their labor costs down now that UA is well on the road to doing that.

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I believe that the UA pilot''s TA will pass by a fairly large margin. No one likes voting themselves a pay cut and giving up hard won work rules but the writing is clearly on the wall that this is much more desirable than one imposed upon the membership by the BK judge.

Those that will whine the most will be those who have been "milking the system" all along. My heart goes out to our other employees (many more besides just pilots) who will be getting pink slips over the next few months.

I''m hoping that AMR can avoid BK and wish everyone there the absolute best.

Cheers,
Z