admluvs2fly
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Bankruptcy: Is Ch 11 Imminent For AA?

Sat Sep 17, 2011 11:38 pm

Over the last month , over 113 pilots have taken early retirement . Many pilots whom have some years left in the tank. However, if AA declares bankruptcy, then their Class B shares have, which can only be taken upon retirement, will be worthless.

There have been some chatter on other airline forums, as well as pilot forums and from APA official communications, that all might lead to bankruptcy.
 
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lightsaber
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sat Sep 17, 2011 11:58 pm

Imminent?   

Going to happen?   

AA needs to have all the cash they require for reorganization prior to entering bankruptcy. Borders books just proved what happens if you enter Ch. 11 without enough cash. You fold. They entered bankruptcy with the hope of "debtor in possession" financing which didn't happen. The whole point of AA building up their cash is to prepare for Ch. 11.

Now why not imminent?
1. They need to spin of AE first. That will speed up the bankruptcy (bankruptcy is expensive per month and should be 'pre-packaged).
2. AA needs to finish finalizing new aircraft orders. The point of bankruptcy is to help void leases. AA needs the new aircraft coming in first.
3. Further planning for efficiency improvements. I suspect much of this has been done, but I 'have a hunch' more planning has been delayed to try to hold off the speculation... that is happening anyway.

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AAR90
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 12:36 am

Quoting admluvs2fly (Thread starter):
However, if AA declares bankruptcy, then their Class B shares have, which can only be taken upon retirement, will be worthless.

AA pilot retirement plans have no such thing as "Class B shares." There is an "A-Fund" and "B-Fund."

In an AA/AMR bankruptcy filing, the A-Fund is most at risk since it is a Defined Benefit Plan. AA/AMR would most likely "terminate" the A-Fund plan and turn it over to the PBGC. In that case a senior AA pilot with lots of years service would lose most (but not all) of his A-Fund benefits. However, the AA A-Fund is NOT where the majority of an AA pilot's retirement is placed.

The B-Fund is a Defined Contribution Plan and assets in this plan are in a separate trust not associated with AA/AMR so an AA/AMR bankruptcy will not affect the assets of this plan. The only potential loss to a pilot is the cash that he has earned but that has not yet been "deposited" into his B-Fund share account (done once/quarter). B-Fund assets are professionally managed and invested primarily in US stock markets. B-Fund per share pricing moves similarly to US stock market indexes.

During my career with AA, I have seen many of these retirement "surges." Each and every time (including this time) the reason given by those who retire "early" is the large and rapid drop in B-Fund share value (stock market indexes), the ability to retire with a share price that was "locked-in" up to 60 days earlier, and their belief that their total retirement compensation would be greater if they retire now rather than later (depending upon their individual set of circumstances).

AA pilot retirement plans are prohibited from investing in ANY airline. Just not a reasonable retirement investment strategy to put retirement funds in the same industry as where your active income is coming from.
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Cubsrule
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 1:03 am

I think the whole premise of airline Chapter 11 may be sort of, well, 2005. I'm not sure an airline can successfully reorganize in 11 under the new Code, but I'd love to hear an argument that it's possible.
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0newair0
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 1:25 am

Quoting Cubsrule (Reply 3):
I think the whole premise of airline Chapter 11 may be sort of, well, 2005. I'm not sure an airline can successfully reorganize in 11 under the new Code, but I'd love to hear an argument that it's possible.

This is way over simplified, but I believe the largest change basically did away with "debtor-in-possession" and created "creditor-in-possession" - Before they could try an find ways to cut out any expenses owed... now they have to find away to finance all expenses already owed + reorganization costs. So, any airline that can find creditors willing to back the full cost of Chapter 11 could successfully go through it and reorganize.
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Cubsrule
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 1:41 am

Quoting 0NEWAIR0 (Reply 4):
So, any airline that can find creditors willing to back the full cost of Chapter 11 could successfully go through it and reorganize.

Sure. Why would airline creditors do that? They must know how the industry burns through capital (and has done so for decades).
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crAAzy
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 1:46 am

Quoting AAR90 (Reply 2):

During my career with AA, I have seen many of these retirement "surges." Each and every time (including this time) the reason given by those who retire "early" is the large and rapid drop in B-Fund share value (stock market indexes), the ability to retire with a share price that was "locked-in" up to 60 days earlier, and their belief that their total retirement compensation would be greater if they retire now rather than later (depending upon their individual set of circumstances).

  

Representing approximately a stock value about 50% more than it has been recently ... and then you have the upcoming Eagle spin off which will likely result in further dilution of share value.

Obviously they feel there's not much upside with the company in the next few years.
 
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 5:59 am

Quoting crAAzy (Reply 6):
Representing approximately a stock value about 50% more than it has been recently ... and then you have the upcoming Eagle spin off which will likely result in further dilution of share value.

Obviously they feel there's not much upside with the company in the next few years.

You missed the point that no AA pilot retirement plan may be invested in AMR - or any other airline. It doesn't matter what AMR share price does. AMR shares and share pricing has nothing to do with pilot retirements (or any form of AA pilot compensation).


The 2011 B-Fund investment targets are (were?): ~30% S&P500 index, ~20% large cap value/growth, ~15% small cap value/growth, ~25% international value/growth, and ~10% emerging markets. B-Fund share price as of Feb.28 = $97.95. Share price as of Jul.31 = $90.81. Use your imagination as to what it is now.... and you'll know why some folks decided it was time to retire.
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flyabr
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 6:21 am

AA is too big to fail...just like those bailed out banks! The Fed Govt would get hauled in courtesy of a number of Texas/Dallas politicians who speak about free markets until their favorite HUGE airline is on the ropes!  
 
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OzarkD9S
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 7:25 am

Quoting flyabr (Reply 8):


AA is too big to fail...just like those bailed out banks!

So was Braniff. And Eastern. And Pan Am.
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slcdeltarumd11
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 7:25 am

The market clearly doesn't think they will yet. AMR has way too many shares out there for people to think that is anytime soon. I think it will be a while if ever for them. I think they need to retire the fuel guzzlers faster even if it means shrinking market share significantly. AA might be "too large to fail" and a government might help them.

Maybe AAcan get the employees to realize next negotiating rounds they need reduced costs or bad things might happen. I think more and more people at AA are slowly realizing they are not doing too great at the moment its finally soaking in. If Frontier is any guide when things really are bad in this economy sometimes employees will take lower pay to ensure they have jobs. Frontier had no problems at all as i think most employees realized it was life or death last negiations. I think the economy being so bad and everyone knowing someone unemployed and looking for a job is gonna make them more willing to negotiate to ensure they have one. Personally i think AA is getting killed in fuel costs but of course they do spend alot in labor. They need more mad-dogs retired ASAP even if it means shrinking they are clearly loosing money and oil isn't gonna crash. They really might need to become a smaller airline but they have alot of options, extremely valuable hubs, valuable routes and slots/assets all things that Frontier didn't and doesn't have to work with. AMR has many options and alot of good things i think they can and will avoid Ch 11

If you look at the market they seem more nervous that Frontier is really in trouble as Republic has seen people bailing to get rid of it. Republic seems to be the much more worried company at the moment. The stock has tumbled from 9 to 3 in the last year consistantly.
 
flyabr
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 7:37 am

Quoting OzarkD9S (Reply 9):
So was Braniff. And Eastern. And Pan Am.

I could be wrong...but i don't think those airlines were anywhere close to the size of the current AA...

The same goes for Delta...UA-CO...WN: I seriously doubt they would ever be "allowed" to liquidate. They'd be saved by the tax payers...jmo!  
 
kl911
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 8:19 am

Quoting slcdeltarumd11 (Reply 10):
AA might be "too large to fail" and a government might help them.

That would be illegal state aid and against all logic of competition. If a company produces losses forever, burning cash and clearly not well run it should go bankrupt. There will be others to take over the market. I still think this US Chapter 11 thing is really falsifying global competition. Sorry for the AA folks, but thats what a free market does.
 
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 9:03 am

Quoting kl911 (Reply 12):
That would be illegal state aid and against all logic of competition.

How would the government loaning money to AA be illegal or against logical competition? Its better for all of us to have more choices and lower fares and the government can loan them money.
 
kl911
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 9:18 am

Quoting slcdeltarumd11 (Reply 13):
Its better for all of us to have more choices and lower fares and the government can loan them money.

You are talking about tax money here. A government shouldnt be involved in private businesses. IMO. And like I said, another new airline will rise and give choices and lower airfares. And most likely more comfort and IFE etc like VX.
 
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 9:29 am

Hey kl911,

Here in America we socialize losses...and privatize profits!    
 
kl911
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 9:32 am

Quoting flyabr (Reply 15):
Hey kl911,

Here in America we socialize losses...and privatize profits!

Yes, i figured that one out.  
 
cx828
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 10:59 am

how come the states is one of the most successful countries in the world but the us airlines always apply ch.11 ???? management problem or else????

[Edited 2011-09-18 04:00:44]
 
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usdcaguy
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 12:37 pm

Quoting cx828 (Reply 17):
how come the states is one of the most successful countries in the world but the us airlines always apply ch.11 ???? management problem or else????

During regulation, we had multiple carriers serving multiple slices of the US market without competition. With deregulation, prices fell rapidly when carriers decided to fly in the same markets as everyone else and compete for passengers. Americans have rarely had many other viable options to travel long distances (most trains went away years ago, and driving has always been the province of truckers and families with multiple kids). As a result, there is a huge low-fare market out there for people who cannot afford to pay what it really costs to provide air service, so in the race for market share, the carriers offered low fares that they tried to subsidize with higher fares for those who have a need to travel at the last minute. That model generally did not work as legacy labor and capital costs overran the revenue coming in the door. As a result, the carriers had to go to the judge to reorganize their finances and renegotiate agreements. So, yes, there may have been some bad decisions made regarding costs, but the fact that this phenomenon happened to so many carriers makes me think that it had less to do with bad management and more to do with the fact that, for a variety of reasons, the carriers' creditors (labor, GDS vendors, aircraft lessors, etc.) had too much power at the negotiating table. Declaring bankruptcy was about the only way for the carriers to change the nature of those relationships, however cruel and desperate that may have been.
 
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 12:56 pm

Quoting kl911 (Reply 12):

Yes, DL, UA, CO, and US have all learned what the free market would have done to them without Chapter 11. AA would have been the only legacy left. The others would be kaput without Chapter 11.

I have no doubt AA will face it at some point. The others did and came out much stronger. AA can too.
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cx828
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 12:58 pm

then why about the other carriers in the world didn't face the same problem (labour, aircrafts lessors), eb. like BA, LX, CX, SQ, they also have the labour or pilot strike before?? How come they can resolve that??
 
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Polot
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 1:03 pm

Quoting LAXdude1023 (Reply 19):
Yes, DL, UA, CO, and US have all learned what the free market would have done to them without Chapter 11. AA would have been the only legacy left. The others would be kaput without Chapter 11.

Its wrong to say that without Chap 11 AA would be the only ones left. Yes, they are the only ones who haven't gone through the process, but the other airlines didn't necessary go through it all at the same time. If, say CO closed while bankrupt in the early 90s, and US and UA both shut down when they entered bankruptcy, it is entirely possible that that would have cleared up enough competition to allowed DL and NW to survive.
 
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 1:09 pm

Quoting kl911 (Reply 14):
You are talking about tax money here. A government shouldnt be involved in private businesses.

Also, over here, the Airlines are protected almost as if they were a Civil Service. I wouldn't be surprised if AA filed, but I also wouldn't be surprised if the Govt. helped them out due to the number of aircraft AA can mobilize quickly if the Department of Defense places the call to activate the Civil Reserve Air Fleet.

Just my .02
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Polot
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 1:15 pm

Quoting WNwatcher (Reply 22):
I wouldn't be surprised if AA filed, but I also wouldn't be surprised if the Govt. helped them out due to the number of aircraft AA can mobilize quickly if the Department of Defense places the call to activate the Civil Reserve Air Fleet.

If the government helps out it would be to save jobs, not because of CRAF. AA is not the biggest airline in CRAF nor are they the only airline in CRAF. The others, including whoever expands to fill the void if AA shut down, would easily cover the governments needs.
 
LAXtoATL
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 1:20 pm

Quoting flyabr (Reply 8):
AA is too big to fail...just like those bailed out banks!

Difference between AA and the banks is that if the banks had been allowed to fail it would have destroyed an entire industry and likely taken a few other industries down with it. Same thing with the auto companies. AA can fail and the airline industry will be just fine, better even. Remember when the industry was facing a crisis after 9/11 the government did provide a bailout package to the airlines, but when the weaker ones subsequently went into bankruptcy court there was no special government assistance. So, unless its a political thing and the Texas heavy weights are determined to save their home time airline don't expect any special government treatment (this is unlikely but the only way I see AA getting any form of government bailout). That being said, AA shouldn't need any special government bailout, while the bankruptcy rules have changed and it will be a tougher experience for AA there is no reason they shouldn't be able to reorganize in ch11 and come out a smaller, more efficient, more competitive airline.
 
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par13del
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 1:23 pm

Quoting cx828 (Reply 17):
how come the states is one of the most successful countries in the world

Based on the borrowing money from other countries putting themselves in debt to offer aid to other countries?

Quoting WNwatcher (Reply 22):
I wouldn't be surprised if AA filed, but I also wouldn't be surprised if the Govt. helped them out due to the number of aircraft AA can mobilize quickly if the Department of Defense places the call to activate the Civil Reserve Air Fleet.

Just my .02

So how larger was NW, UA and DL when they filed for Chpt.11 and why did the government not jump to their aid like they did the auto companies, my .02 is that there were different politicians around at that time.
Now if it were a strike, I could see the Feds getting involved and pulling the RailRoad act etc. but filing for Chpt.11 has a process built in which allows continued operation while good people work to resolve the issue, could the feds ultimately get involved, sure, but that would be months down the road after the filing.
A number of folks still do not get what Chpt.11 is all about, probably because its called bankruptsy.
 
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usdcaguy
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 1:38 pm

Quoting cx828 (Reply 20):
then why about the other carriers in the world didn't face the same problem (labour, aircrafts lessors), eb. like BA, LX, CX, SQ, they also have the labour or pilot strike before?? How come they can resolve that??

The answer to this is complex, but suffice it to say it has mostly to do with the historical lack of competition within those carriers' countries as well as their reliance upon long-haul flying for profits. If the American carriers had been structured the same way, there may not have been so many losses, but they had huge domestic networks exposed to competitive pricing for years that did not make up for the legacy costs they inherited from the era of regulation. Since bankruptcy and consolidation, the US carriers have been able to increase long-haul flying to make their networks profitable, and we are already seeing the results of this. In essence, I believe carriers like BA, LX, CX and SQ have nice products as they fly more long-haul routes where this matters more and are exposed to less pricing competition, although this is beginning to change with the growth of LCCs in Europe and Asia. Within the US domestic market, the demand for low fares is so high that being able to provide air service on the cheap matters much more than providing a good product or brand, however upsetting that may be to customers once on board the aircraft.
 
SPREE34
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 2:05 pm

Quoting admluvs2fly (Thread starter):
and from APA official communications, that all might lead to bankruptcy.

You have an APA source, and quote for that? I believe you are mis-quoting APA's statement concerning AA's financials.

The blast I read didn't say anything might lead to bankruptcy. The writter (APA) clarified that he was not sugesting, in any way, that bankruptcy was coming. It did address various future scenarios and cautioned members to stay informed.
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OzarkD9S
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 2:12 pm

Quoting flyabr (Reply 11):


I could be wrong...but i don't think those airlines were anywhere close to the size of the current AA...

It's not the size is was referring too, but rather the mindset that they were too big to fail. Many people at Braniff had that mindset, but their heads were still in the deregulated environment when failing carriers were "Gentleman's Routed" into the arms of healthier carriers, three notable ones were Capital into United, Mohawk into Allegheny and Northeast into Delta.

AA will have a very different Ch 11 process then we've seen previously if AMR goes that route however.
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frmrCapCadet
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 4:13 pm

Res European airlines, I believe a number of them have had their own problems about as severe in in the US.
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kl911
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 5:16 pm

Quoting frmrCapCadet (Reply 29):
Res European airlines, I believe a number of them have had their own problems about as severe in in the US.

Yes, and they went bankrupt, like Swissair, Sabena etc etc. Why would airlines require a different treatment then other companies? Can Ford or AT&T go into Ch 11? I dont think so.
 
SyrAlex
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 5:25 pm

Quoting OzarkD9S (Reply 9):
So was Braniff. And Eastern. And Pan Am.

Very good point, you beat me to it!
 
LAXtoATL
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 5:35 pm

Quoting kl911 (Reply 30):
Can Ford or AT&T go into Ch 11? I dont think so.

Of course they can. GM just went through Ch 11 a couple years ago and Ford just nearly avoided it at the same time.
 
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Polot
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 5:51 pm

Quoting kl911 (Reply 30):
Yes, and they went bankrupt, like Swissair, Sabena etc etc. Why would airlines require a different treatment then other companies? Can Ford or AT&T go into Ch 11? I dont think so.

Not all of them. Alitalia and Olympic are perfect examples of examples of airlines that limped along far too long in Europe due to their respective governments (although their privatized successors are doing much better).

And Chapter 11 is available to all companies in the US. It is not industry specific.
 
hiflyer
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 6:01 pm

Quoting OzarkD9S (Reply 9):
So was Braniff. And Eastern. And Pan Am.

and texas corp Continental Airlines twice!
 
frmrCapCadet
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 6:52 pm

AT&T, or at least a number of its components have gone through very bad times. The current company has very little connection with the company of the 1940s. It is interesting that it too unwent major deregulation a few decades ago. The old business model simply could not co-exist with modern technological changes, and it was famously split up into regionals and a long distance service.

[Edited 2011-09-18 11:56:24]
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ckfred
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 7:58 pm

Quoting Cubsrule (Reply 3):
I think the whole premise of airline Chapter 11 may be sort of, well, 2005. I'm not sure an airline can successfully reorganize in 11 under the new Code, but I'd love to hear an argument that it's possible.

Didn't DL and NW file for Chapter 11 within a few days of each other, because of the changes in the bankruptcy code that were about to effect? If DL and NW had waited, until their positions had become more dire, they might not have qualified under the revised code. AA/AMR might very well be able to file and reorganize under Chapter 11, but perhaps someone with experience under the current bankruptcy code could better speak to this issue.


Quoting flyabr (Reply 8):
AA is too big to fail...just like those bailed out banks! The Fed Govt would get hauled in courtesy of a number of Texas/Dallas politicians who speak about free markets until their favorite HUGE airline is on the ropes!

Of course, Southwest and United/Continental would be pressuring those same politicians to let AA fail. If AA were to go under, UA/CO would get a lot of traffic going through the IAH hub, and WN would start setting up shop at DFW, with several vacated terminals to chose from.

And whose to say that AA couldn't successfully reorganize? Look how long UA spent in Chapter 11 and kept putting off the filing of its reorganization plan, despite complaints from the creditors. And despite the saber-rattling by the F/A union, they never undertook even on CHAOS strike.
 
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 8:11 pm

Quoting LAXtoATL (Reply 32):
Of course they can. GM just went through Ch 11 a couple years ago and Ford just nearly avoided it at the same time.

The UAW gave Ford very similar concessions of employee health benefits that GM got when it went CH 11. So Ford essentially got the benefits if CH 11 without going through the whole process.
 
jfk777
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 8:52 pm

Maybe its time AA freeze its defined benefit pension plans and go to defined contribution and profit sharing plans.
 
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par13del
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 9:00 pm

Quoting ckfred (Reply 36):
Look how long UA spent in Chapter 11 and kept putting off the filing of its reorganization plan, despite complaints from the creditors.

Hence the reason why the rules were changed, the politicians finally got that the rules were being abused, it was all because UA showed the way.

Quoting ckfred (Reply 36):
Didn't DL and NW file for Chapter 11 within a few days of each other, because of the changes in the bankruptcy code that were about to effect? If DL and NW had waited, until their positions had become more dire, they might not have qualified under the revised code.

Yep, qualifications have changed as well as conduct once in the re-org process.
 
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hOMSaR
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 9:26 pm

Quoting ckfred (Reply 36):
Didn't DL and NW file for Chapter 11 within a few days of each other,

If my memory serves me, the two actually filed on the same day.
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Cubsrule
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 9:40 pm

Quoting jfk777 (Reply 37):
So Ford essentially got the benefits if CH 11 without going through the whole process.

Correction: Ford got some of the benefits. Ford didn't get to close and shed half of its plants as GM did.

Quoting ckfred (Reply 36):
Of course, Southwest and United/Continental would be pressuring those same politicians to let AA fail.

It's a moot point. "Too big to fail" is really "too interconnected to fail." In the auto industry, times were already tough for suppliers at the time of the bailouts (Visteon filed for b/k a couple of weeks before GM and Chrysler, Delphi was in disarray, etc.). Had GM and Chrysler liquidated, auto manufacturing in the United States would have stopped in fairly short order because no one would have been able to get components (off topic, but some - including me - think that the industry could have survived a Chrysler liquidation but that it wasn't politically palatable to save GM but not Chrysler).

If AA were to liquidate, the effects would be nothing but positive for the competition. The airline industry isn't interconnected like the auto industry.

[Edited 2011-09-18 14:41:55]
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Jahmike
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RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 10:07 pm

Quoting flyabr (Reply 15):
Here in America we socialize losses...and privatize profits!

These words are so true...........
 
YULWinterSkies
Posts: 1266
Joined: Thu Jun 09, 2005 11:42 pm

RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 10:39 pm

Quoting flyabr (Reply 8):
The Fed Govt would get hauled in courtesy of a number of Texas/Dallas politicians who speak about free markets until their favorite HUGE airline is on the ropes!

So. Well. Said.

Quoting kl911 (Reply 14):
Quoting slcdeltarumd11 (Reply 13):
Its better for all of us to have more choices and lower fares and the government can loan them money.

You are talking about tax money here. A government shouldnt be involved in private businesses. IMO.

Then, you missed what happened to other airlines.
When I doubt... go running!
 
CIDFlyer
Posts: 1877
Joined: Wed Apr 13, 2005 7:19 am

RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 11:02 pm

[quote=ckfred,reply=36]Of course, Southwest and United/Continental would be pressuring those same politicians to let AA fail. If AA were to go under, UA/CO would get a lot of traffic going through the IAH hub, and WN would start setting up shop at DFW, with several vacated terminals to chose from.

If worse came to worse and AA did close up, I bet DL would be back with a hub at DFW in a heartbeat using the combined resources of CVG and MEM which clearly would be gone in that scenerio. Or US Airways shifting PHX to DFW. Too much premium traffic to ignore. I dont ever envision seeing DFW being a spoke for anyone, im sure it would retain hub status by some airline ready to swoop in and pick up the pieces. Its too big of a market.
 
jfk777
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Joined: Tue Aug 22, 2006 7:23 am

RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 11:05 pm

Quoting Cubsrule (Reply 41):
If AA were to liquidate, the effects would be nothing but positive for the competition. The airline industry isn't interconnected like the auto industry.

AA would be merged with some other airline before that happens. Miami has lot of value especially now with the new terminal opening. Chicago has lots of value in slots too. If Delta acquired AA, it could happen, then it gets all those LHR slots. All those new planes being ordered are with a fortune alone for their deivery positions. DL would also love to have all those AA 777's. IF AA merged or liquidated, that would leave just 2 large US airlines.
 
FoxTwo
Posts: 96
Joined: Thu Jul 14, 2011 10:49 pm

RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 11:07 pm

Sorry forgive the amateur question.

Why is an airline (which may go bankrupt) , be purchasing 600 new airplanes?
F2
 
LAXtoATL
Posts: 571
Joined: Mon Oct 26, 2009 3:55 am

RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 11:21 pm

Quoting FoxTwo (Reply 46):
Why is an airline (which may go bankrupt) , be purchasing 600 new airplanes?

For starters they aren't purchasing any airplanes, they are leasing new airplanes and the number is well below 600. The reason an airline that may go bankrupt is leasing a bunch of new planes is because ONE reason they are in such a predicament is because they have a bunch of really inefficient old aircraft that are guzzling expensive fuel and racking up huge maintenance bills that need replacing yesterday. By all accounts the increase in leasing expenses will be offset by the savings in fuel expense, maintance expense etc. Also, if they do have to file for bankruptcy protection and plan to emerge it is hugely beneficial to already have these aircraft on order instead of trying to arrange a deal during or after bankruptcy.
 
Max Q
Posts: 5629
Joined: Wed May 09, 2001 12:40 pm

RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 11:30 pm

AA can fail just like any other business, the government will not bail them out regardless of their size.



However, what is more likely is a CH11 filing and 'reorganisation'



How they can compete with DL and UA's networks is another question altogether.
The best contribution to safety is a competent Pilot.
 
DALelite
Posts: 1318
Joined: Thu Jun 01, 2000 7:00 am

RE: Bankruptcy: Is Ch 11 Imminent For AA?

Sun Sep 18, 2011 11:40 pm

Quoting jfk777 (Reply 45):
If Delta acquired AA

i like that idea  
They loved to fly and it showed..

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