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Topic: Has AA Canceled Their A320neo/737max Orders?
Username: 747400sp
Posted 2012-03-12 01:56:24 and read 13907 times.

With the recent Chanpter 11, I wonder, has AA cancel their A320neo/737max order?

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: RubberJungle
Posted 2012-03-12 02:30:57 and read 13761 times.

No, but Airbus - as a precautionary measure - is no longer treating the A320neo order as firm.

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: kl911
Posted 2012-03-12 04:28:40 and read 13324 times.

Quoting RubberJungle (Reply 1):
No, but Airbus - as a precautionary measure - is no longer treating the A320neo order as firm.

And Boeing? AFAIK that was just an MOU right, not firm yet?

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: ORDJOE
Posted 2012-03-12 05:10:05 and read 13107 times.

There is definitely something more to the story, I thought that huge order was in early fall and they declared BK in Nov. Airbus, AA, and boeing knew BK was coming one day eventually

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: SLCPilot
Posted 2012-03-12 05:25:15 and read 12979 times.

They're not out of money OR the ability to borrow it, they just declared bankruptcy, something entirely different ! This just means management can selectively toss aside commitments it's made in the past, to banks, contracted services, and it's own employees while destroying stock value and employee pension values.

Am I right?

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: jfk777
Posted 2012-03-12 05:39:44 and read 12839 times.

AA is still taking delivery if 738's from prior orders.

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: LAXtoATL
Posted 2012-03-12 05:59:11 and read 12701 times.

Quoting SLCPilot (Reply 4):
This just means management can selectively toss aside commitments it's made in the past, to banks, contracted services, and it's own employees while destroying stock value and employee pension values.

False! Bankruptcy is not a "let management do what they want ride". In fact once a company enters bankruptcy, management gives up control of what will happen to the company. The creditors and judge now control the fate of the company. Management will request the moon and the stars, but they cannot unilaterally implement or cut anything in bankruptcy. (example: look at how AA initially asked to dump all pension obligations and the creditors (led by the unions and PBGC) said that was not acceptable and already they are now trying to freeze instead of dump most of their pensions). The one thing bankruptcy usually does is destroy all stock value, however by the time a company files for bankruptcy there is very little value to begin with.

Quoting SLCPilot (Reply 4):
They're not out of money OR the ability to borrow it, they just declared bankruptcy, something entirely different !

They are not out of money, but their ability to borrow right now is almost non-existent. Its complicated, but they don't have the ability to pledge assets to back loans while in bankruptcy which is why the orders and financing was arranged before the filing.

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: Blueman87
Posted 2012-03-12 07:05:22 and read 12313 times.

i Heard the Bankruptcy Court let them Buy all the Airplanes i try to find that link

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: Blueman87
Posted 2012-03-12 07:12:16 and read 12248 times.

http://www.aa.com/i18n/amrcorp/newsr...p?v_locale=en_US&v_mobileUAFlag=AA
they didnt cancel there are odered

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: rfields5421
Posted 2012-03-12 07:14:59 and read 12213 times.

The aircraft purchase is supposed to happen AFTER the airline emerges from bankruptcy.

So other than the manufacturers being unable to receive any new payments during that approx one year long process, the orders will be completely normal.

Bankruptcy will let AA get rid of their financial obligations to some older aircraft they no longer want in their fleet. They will still need the new aircraft after they are finished with Chapter 11.

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: AAIL86
Posted 2012-03-12 07:20:55 and read 12146 times.

Quoting ORDJOE (Reply 3):
There is definitely something more to the story, I thought that huge order was in early fall and they declared BK in Nov.

No, the order was announced to the press on July 20, 2011.

Source: http://www.npr.org/blogs/thetwo-way/...aircraft-order-in-aviation-history

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: Stitch
Posted 2012-03-12 09:08:00 and read 11207 times.

Quoting 747400sp (Thread starter):
With the recent Chanpter 11, I wonder, has AA cancel their A320neo/737max order?

AA entered the order with the expectation they would file Chapter 11. The financing part was one of the reasons AA went with Airbus - they were more willing to finance a deal with an AA C11 filing than Boeing was.

AA have yet to sign their 737MAX order, so it remains an MoU and is not reflected on Boeing's order page. AA did sign their 100 737-800s they ordered at the same time, so that order is listed on Boeing's page.

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: ckfred
Posted 2012-03-12 09:13:00 and read 11079 times.

Quoting SLCPilot (Reply 4):
They're not out of money OR the ability to borrow it, they just declared bankruptcy, something entirely different ! This just means management can selectively toss aside commitments it's made in the past, to banks, contracted services, and it's own employees while destroying stock value and employee pension values.

Am I right?

At the rate AA was burning through cash, it would have been down to zero in 18 to 24 months. Having a good cash balance upon filing Chapter 11 means not having to obtain debtor-in-possession financing (DIP). DIP is just one more hassle, because the lender wants to add his two cents to the creditors, when it comes to getting decisions approved by the judge.

Pretty much everything AA could mortgage had been mortgaged, meaning that any unsecured financing would have been at very, very high interest rates.

Considering the amount of interest that AA was paying, and the eventual repayment of principal on numerous debt instruments, making capital expenditures were becoming extremely difficult.

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: frmrCapCadet
Posted 2012-03-12 09:15:09 and read 11029 times.

IIRC getting newer and more efficient planes needed to be part of any plan to successfully emerge from bankruptcy. And I think all stakeholders acknowledged that was true.

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: Daysleeper
Posted 2012-03-12 09:28:21 and read 10781 times.

Quoting Stitch (Reply 11):
AA entered the order with the expectation they would file Chapter 11. The financing part was one of the reasons AA went with Airbus - they were more willing to finance a deal with an AA C11 filing than Boeing was.

Hmm, If Boeing didn’t really want to deal with AA because of the finances then why did they offer them the Max before it even had board approval? Or why sell any aircraft to AA at all?

I’ve no doubt that the financial package offered by Airbus played a part in this order, but to suggest this was because Boeing were “less willing” than Airbus is nonsense.

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: ckfred
Posted 2012-03-12 09:35:43 and read 10687 times.

IIRC correctly, Boeing wasn't willing to offer the financing that Airbus was. They were standing on the fact that AA has an all-Boeing fleet, and that it would be more expensive for AA to bring A320s into the fleet (training, spare parts, etc.). When AA advised Boeing that it would buy a large number of A320 family, that's when Boeing decided to offer the MAX and improve its financing terms.

It was either get 200 planes or none.

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: Stitch
Posted 2012-03-12 09:36:50 and read 10632 times.

Quoting Daysleeper (Reply 14):
Hmm, If Boeing didn’t really want to deal with AA because of the finances then why did they offer them the Max before it even had board approval?

Because AA ordered the A320 and A320neo.



Quoting Daysleeper (Reply 14):
I’ve no doubt that the financial package offered by Airbus played a part in this order, but to suggest this was because Boeing were “less willing” than Airbus is nonsense.

Hey, I just read it in the papers. Register your objections with the media, please.

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: rotating14
Posted 2012-03-12 12:04:58 and read 8801 times.

Quoting Daysleeper (Reply 14):

Because from a business standpoint something is better than nothing. They already have 738's rolling off the FAL. The board at Boeing would not allow it Im sure. When you take into account they will have new 777's coming soon and the history of being a solid customer, fleet commonality (737), that weighs a lot. I personally wanted B to build a NSA but the market wanted something now not later, thus forcing B to tweak the current model, to furnish what we call the MAX today.

Topic: Has AA Canceled Their A320neo/737max Orders?
Username: vegas005
Posted 2012-03-12 12:28:11 and read 8479 times.

Quoting Blueman87 (Reply 7):
The creditors and judge now control the fate of the company.

My friend, in bankruptcy court the creditors are along for the ride and it is not a pretty one usually. I was surprised to see AA make the original order in the first place and it will be interesting to see what plays out,,,

Topic: RE: Has AA Canceled Their A320neo/737max Orders?
Username: dtwpilot225
Posted 2012-03-12 18:22:39 and read 4947 times.

Remember Chapter 11 is bankruptcy Protection not liquidation. Hence American filed chapter 11 with 4 billion dollars in the bank. They filed because at the rate they were going, they would lose all of that money if they did nothing. The rules of Chapter 11 have changed so it wont be the same as Delta's, but I see American taking all of these deliveries and being a strong airline in 5 years.


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