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LCDFlight
Posts: 617
Joined: Wed Jan 01, 2020 9:22 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 12:58 pm

JAMBOJET wrote:
LCDFlight wrote:
LJ wrote:

The current bail out makes sense as it would have wiped out most if not all airlines, something you probably don't want as a government. However, that doesn't mean they need to be supported indefinitely.


I understand that argument, so let me try to reply.

1. If all Big 4 airlines liquidate, there are plentiful experienced ATP looking for a job, eager to work.
2. If all Big 4 airlines liquidate, there are many well maintained fleets looking for an assignment ASAP.
3. "", there are expert airline HQ staff ready to set up an airline.
4. New airlines can be set up in weeks, if there is demand going unserved.
5. During liquidation, the needed regulatory pieces would be available for sale - maintenance certificates, training, etc.

There are many things to worry about, but insufficient airline capacity is not something the US ever needs to worry about. People who worry about that don't understand.

I'd have to guess you've never been involved in a logistics Company. They aren't as simple to start up, especially in an extremely regulated industry, as you suggest. We aren't talking about a new restaurant in Hell's Kitchen or West Loop. Take someone like David Neeleman setting up Breeze/Moxy. He's started new airlines all over the world and yet didn't even publicly bring up Moxy until June, 2018 and it's still not off the ground (will it ever?). There are plenty of used aircraft and failing airlines around the world where he could've had aircraft tomorrow if it was as simple as you suggest.
I generally don't like federal bailouts. However, what you miss is that all of the US airlines actually had a way to survive with their piles of billions of cash: Shut down the infrastructure of the US and quit all flying altogether and lay off everyone temporarily. However, the federal government didn't like that option and came up with a way to prevent that.
Like it or not, the US has a critical infrastructure that is run by the private sector that had the full legal ability to shut down the US' infrastructure to survive the government-mandated shutdown.


Nope, this is a smokescreen. Sure, I have been involved in airlines, enough to know how resilient and flexible they are. They can be in Chapter 11 today, eject labor and financing deals this afternoon and re-size to serve the existing market by tomorrow morning. No legal flight certificates lapse at all. We saw this happen almost a dozen times in recent years.

I understand this was a chaotic situation where it seemed like maybe we need to bail various things out. I even agree that prohibiting international flying was really rough, so rough that some bailout is fair.

We can expect much more of those communications and those narratives in the coming months and years. Tell a nice story and get $50 billion? Anticipate long lines of storytellers.

Looking closely, the current problem is too MUCH capacity, not too little capacity.
 
WaywardMemphian
Posts: 1501
Joined: Sat Dec 13, 2014 9:05 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 1:06 pm

CIDFlyer wrote:
My opinion DL is safe. If UA goes, for ORD AA will pick up the slack. Maybe B6 grows there. DL will want IAH for a south central Texas hub. DEN southwest and Frontier could pick up the slack. LAX Delta expands. SFO perhaps AA could take over. EWR and IAD would probably be picked over.

If it was AA- Delta takes DFW and DCA and UA would take CLT and MIA.

I also think Allegiant will be fine,
They have done a great job of diversifying their network. Sure they go to a lot of travel destinations but they also provide a good link for people with 2nd home/ relatives who have relocated to those areas. I know a lot of people who use them just for that.

Needless to say, hopefully they all stay in business in one form or another.


Allegiant will bounce back as fast or faster than anyone. Price , type of destination and type of customers that go to those destinations. Same ones demanding lockdowns end.
 
jayunited
Posts: 2957
Joined: Sat Jan 05, 2013 12:03 am

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 1:23 pm

kalvado wrote:
Pretty much everyone agrees that demand for flying is collapsed, it will be weak for a while, and will take long time to recover - if full recovery happens at all, as internet technologies definitely will make some travel redundant.
That means that cash flow from ticket sales will support fewer jobs.
That job loss may be somewhat uniformly distributed between airlines, or some may do better than others, to the point some companies wouldn't make it. My bet that job loss would be about the same regardless of how things would work, demand would still be about the same.
So we're not wishing job loss, we witness the loss.
What would work better in long term?
From long term perspective, "too big to fail" is a poisoning approach. Market has to allow failure of existing players and reentry of new ones. And we pretty much agree that there are weaker ones and stronger ones.



When this crisis first started and most companies shifted to working from home I thought internet technologies would make going to the office and travel redundant. But guess what is moving through the Chicagoland region this morning sever weather, and here in the US we have an aging electrical grid which means power outages. Most office buildings have backup generators to keep the power on and keep employees working. We just had a power surge so what happens when the power goes out and you are without power for 2-5 days? I can tether my laptop to my cell phone but without a way to recharge them the company will get at most a days worth of work out of me. My husband and I were having breakfast when the power surge happened and he started to freak out because if we have no power neither of us can work because don't have a generator.

I think for 2020 most companies will stick with the working from home idea just because we are still in this crisis. However when tornado, hurricane and sever weather season kicks into full gear and there are wide spread prolonged power outages, I think come 2021 instead of having all employees work from home or conducting important meetings via the internet, there will be more people heading back to the office and business travel will begin pick up. It will be interesting to see how business navigate work from home because before the power surge I never thought about how am I supposed to work if I don't have power and I'm sure most businesses haven't thought about it either.

Having said that I don't want to see any airline fail but like you stated the market can not take the approach "to big to fail". I know there will be sever cuts at every airline I'm just hoping we all find a way to navigate through this crisis
 
HNLSLCPDX
Posts: 223
Joined: Sun Nov 01, 2015 5:40 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 1:29 pm

This has to stop, these predictions and guessing games need to stop. I hate this guessing game by people here on a.net of which airlines might go under or the predictions from these “experts” such as the Boeing CEO. As an employee of one of the major US airlines, I would hate to see any of these airlines go under. Peoples lives, how they support themselves and their families, etc., depends on them having jobs. I’m not pretending that the worst could happen and an airline could go under, but to play the guessing game on this forum and make silly predictions while going on very little facts and going off emotions while people’s lives get flipped upside down, destroyed or ruined when the loss of of job happens or the economy tanks is foolish.
 
LAXdude1023
Posts: 6193
Joined: Thu Sep 07, 2006 3:16 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 1:35 pm

HNLSLCPDX wrote:
This has to stop, these predictions and guessing games need to stop. I hate this guessing game by people here on a.net of which airlines might go under or the predictions from these “experts” such as the Boeing CEO. As an employee of one of the major US airlines, I would hate to see any of these airlines go under. Peoples lives, how they support themselves and their families, etc., depends on them having jobs. I’m not pretending that the worst could happen and an airline could go under, but to play the guessing game on this forum and make silly predictions while going on very little facts and going off emotions while people’s lives get flipped upside down, destroyed or ruined when the loss of of job happens or the economy tanks is foolish.


This 100%.

Much respect to you bro.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
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Revelation
Posts: 24589
Joined: Wed Feb 09, 2005 9:37 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 1:50 pm

HNLSLCPDX wrote:
This has to stop, these predictions and guessing games need to stop. I hate this guessing game by people here on a.net of which airlines might go under or the predictions from these “experts” such as the Boeing CEO. As an employee of one of the major US airlines, I would hate to see any of these airlines go under. Peoples lives, how they support themselves and their families, etc., depends on them having jobs. I’m not pretending that the worst could happen and an airline could go under, but to play the guessing game on this forum and make silly predictions while going on very little facts and going off emotions while people’s lives get flipped upside down, destroyed or ruined when the loss of of job happens or the economy tanks is foolish.

Ironically one lesson that may be learned from the present times is that we should all expect some major economic disruption in our life times and we should keep a rainy day fund so the inevitable economic disruption doesn't drive us to despair. I think this current situation will leave a big impression on people and the more responsible ones will start to chose to save money instead of spending on niceties such as air travel and cruises.

Economic disruptions are a part of life just like earthquakes, tornadoes, divorces, major health scares, etc. Just because one discusses them and speculates about where and when they will occur, doesn't mean one wants to see them happen. It's more about accepting they will come and being prepared for them.

I really hope loss of one job doesn't destroy or ruin a person. This isn't like the 1950s where one walked out of high school and found a job they worked for the rest of their working days. Shit happens. We need to be resilient.
Last edited by Revelation on Thu May 14, 2020 1:54 pm, edited 1 time in total.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
Pt56
Posts: 58
Joined: Tue Dec 08, 2015 9:57 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 1:53 pm

Revelation wrote:
HNLSLCPDX wrote:
This has to stop, these predictions and guessing games need to stop. I hate this guessing game by people here on a.net of which airlines might go under or the predictions from these “experts” such as the Boeing CEO. As an employee of one of the major US airlines, I would hate to see any of these airlines go under. Peoples lives, how they support themselves and their families, etc., depends on them having jobs. I’m not pretending that the worst could happen and an airline could go under, but to play the guessing game on this forum and make silly predictions while going on very little facts and going off emotions while people’s lives get flipped upside down, destroyed or ruined when the loss of of job happens or the economy tanks is foolish.

Ironically one lesson that may be learned from the present times is that we should all expect some major economic disruption in our life times and we should keep a rainy day fund so the inevitable economic disruption doesn't drive us to despair. I think this current situation will leave a big impression on people and the more responsible ones will start to chose to save money instead of spending on niceties such as air travel and cruises.

hehehhe not so sure, human species is not know for beeing racional. If we where ... well ... our reality would be far diferent ;)
 
HNLSLCPDX
Posts: 223
Joined: Sun Nov 01, 2015 5:40 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 1:54 pm

Revelation wrote:
HNLSLCPDX wrote:
This has to stop, these predictions and guessing games need to stop. I hate this guessing game by people here on a.net of which airlines might go under or the predictions from these “experts” such as the Boeing CEO. As an employee of one of the major US airlines, I would hate to see any of these airlines go under. Peoples lives, how they support themselves and their families, etc., depends on them having jobs. I’m not pretending that the worst could happen and an airline could go under, but to play the guessing game on this forum and make silly predictions while going on very little facts and going off emotions while people’s lives get flipped upside down, destroyed or ruined when the loss of of job happens or the economy tanks is foolish.


Ironically one lesson that may be learned from the present times is that we should all expect some major economic disruption in our life times and we should keep a rainy day fund so the inevitable economic disruption doesn't drive us to despair. I think this current situation will leave a big impression on people and the more responsible ones will start to chose to save money instead of spending on niceties such as air travel and cruises.


I agree. I would also add that you would’ve thought that the recession around 2009 would have motivated people to do that too.
 
AEROFAN
Posts: 1868
Joined: Wed Aug 04, 2004 9:47 am

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 1:58 pm

HNLSLCPDX wrote:
This has to stop, these predictions and guessing games need to stop. I hate this guessing game by people here on a.net of which airlines might go under or the predictions from these “experts” such as the Boeing CEO. As an employee of one of the major US airlines, I would hate to see any of these airlines go under. Peoples lives, how they support themselves and their families, etc., depends on them having jobs. I’m not pretending that the worst could happen and an airline could go under, but to play the guessing game on this forum and make silly predictions while going on very little facts and going off emotions while people’s lives get flipped upside down, destroyed or ruined when the loss of of job happens or the economy tanks is foolish.


:checkmark: I have been saying pretty much the same thing. The doom and gloom hysteria is beyond the pale and stupid. Any more topics on this board along this line should be deleted or combined into this one.
“You are not entitled to your opinion. You are entitled to your informed opinion. No one is entitled to be ignorant.” ~Harlan Ellison~
 
LJ
Posts: 5353
Joined: Wed Nov 17, 1999 8:28 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 2:03 pm

LCDFlight wrote:
LJ wrote:
The current bail out makes sense as it would have wiped out most if not all airlines, something you probably don't want as a government. However, that doesn't mean they need to be supported indefinitely.


I understand that argument, so let me try to reply.

1. If all Big 4 airlines liquidate, there are plentiful experienced ATP looking for a job, eager to work.
2. If all Big 4 airlines liquidate, there are many well maintained fleets looking for an assignment ASAP.
3. "", there are expert airline HQ staff ready to set up an airline.
4. New airlines can be set up in weeks, if there is demand going unserved.
5. During liquidation, the needed regulatory pieces would be available for sale - maintenance certificates, training, etc.

There are many things to worry about, but insufficient airline capacity is not something the US ever needs to worry about. People who worry about that don't understand.


I think you underestimate the financial impact of all Big 4 going down at once. This could create serious issues in the financial world and panic. Multiple major bankruptcies in one line of business may infect others and before you know it you've a meltdown in the financial world. This is the last thing you want at this moment. You may be right and this wouldn't have happened, but from a risk perspective I can understand why a government provided this round of bail outs. If you add the fact that's election year, you can understand why they provided the bail out packages.

LCDFlight wrote:
Nope, this is a smokescreen. Sure, I have been involved in airlines, enough to know how resilient and flexible they are. They can be in Chapter 11 today, eject labor and financing deals this afternoon and re-size to serve the existing market by tomorrow morning. No legal flight certificates lapse at all. We saw this happen almost a dozen times in recent years.


We're not talking about Chapter 11, but about airlines going into Chapter 7.

jayunited wrote:
I think for 2020 most companies will stick with the working from home idea just because we are still in this crisis. However when tornado, hurricane and sever weather season kicks into full gear and there are wide spread prolonged power outages, I think come 2021 instead of having all employees work from home or conducting important meetings via the internet, there will be more people heading back to the office and business travel will begin pick up


Yet I would think you wouldn't go to your office iin case of a tornado, hurricane ore severe weather conditions?
 
LJ
Posts: 5353
Joined: Wed Nov 17, 1999 8:28 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 2:10 pm

HNLSLCPDX wrote:
I agree. I would also add that you would’ve thought that the recession around 2009 would have motivated people to do that too.


Not really. The financial crisis wasn't as much in the "real world" as this crisis. Those who worked for a bank in certain departments at the time will never forget, however for most people that crisis was about something they didn't understand.
 
LCDFlight
Posts: 617
Joined: Wed Jan 01, 2020 9:22 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 2:22 pm

LJ wrote:
LCDFlight wrote:
LJ wrote:
The current bail out makes sense as it would have wiped out most if not all airlines, something you probably don't want as a government. However, that doesn't mean they need to be supported indefinitely.


I understand that argument, so let me try to reply.

1. If all Big 4 airlines liquidate, there are plentiful experienced ATP looking for a job, eager to work.
2. If all Big 4 airlines liquidate, there are many well maintained fleets looking for an assignment ASAP.
3. "", there are expert airline HQ staff ready to set up an airline.
4. New airlines can be set up in weeks, if there is demand going unserved.
5. During liquidation, the needed regulatory pieces would be available for sale - maintenance certificates, training, etc.

There are many things to worry about, but insufficient airline capacity is not something the US ever needs to worry about. People who worry about that don't understand.


I think you underestimate the financial impact of all Big 4 going down at once. This could create serious issues in the financial world and panic. Multiple major bankruptcies in one line of business may infect others and before you know it you've a meltdown in the financial world. This is the last thing you want at this moment. You may be right and this wouldn't have happened, but from a risk perspective I can understand why a government provided this round of bail outs. If you add the fact that's election year, you can understand why they provided the bail out packages.

LCDFlight wrote:
Nope, this is a smokescreen. Sure, I have been involved in airlines, enough to know how resilient and flexible they are. They can be in Chapter 11 today, eject labor and financing deals this afternoon and re-size to serve the existing market by tomorrow morning. No legal flight certificates lapse at all. We saw this happen almost a dozen times in recent years.


We're not talking about Chapter 11, but about airlines going into Chapter 7.

jayunited wrote:
I think for 2020 most companies will stick with the working from home idea just because we are still in this crisis. However when tornado, hurricane and sever weather season kicks into full gear and there are wide spread prolonged power outages, I think come 2021 instead of having all employees work from home or conducting important meetings via the internet, there will be more people heading back to the office and business travel will begin pick up


Yet I would think you wouldn't go to your office iin case of a tornado, hurricane ore severe weather conditions?


Final post... If there is a real need for more airline services (which is far-fetched), airlines will gladly provide more service at a modest profit. The whole "flights will go to zero" story is a superstition, it could not be more untrue or unrealistic. It reminds me of the "stock market will go to zero" story. Similar story & reasons why not true.

Im selling good news... there will always be an airline industry. The existence of the industry is stable until a better technology comes along. Particular companies or jobs will continue to be unstable.
 
UWPAviation
Posts: 147
Joined: Mon Dec 19, 2016 7:36 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 2:47 pm

Revelation wrote:
HNLSLCPDX wrote:
This has to stop, these predictions and guessing games need to stop. I hate this guessing game by people here on a.net of which airlines might go under or the predictions from these “experts” such as the Boeing CEO. As an employee of one of the major US airlines, I would hate to see any of these airlines go under. Peoples lives, how they support themselves and their families, etc., depends on them having jobs. I’m not pretending that the worst could happen and an airline could go under, but to play the guessing game on this forum and make silly predictions while going on very little facts and going off emotions while people’s lives get flipped upside down, destroyed or ruined when the loss of of job happens or the economy tanks is foolish.

Ironically one lesson that may be learned from the present times is that we should all expect some major economic disruption in our life times and we should keep a rainy day fund so the inevitable economic disruption doesn't drive us to despair. I think this current situation will leave a big impression on people and the more responsible ones will start to chose to save money instead of spending on niceties such as air travel and cruises.

Economic disruptions are a part of life just like earthquakes, tornadoes, divorces, major health scares, etc. Just because one discusses them and speculates about where and when they will occur, doesn't mean one wants to see them happen. It's more about accepting they will come and being prepared for them.

I really hope loss of one job doesn't destroy or ruin a person. This isn't like the 1950s where one walked out of high school and found a job they worked for the rest of their working days. Shit happens. We need to be resilient.


Amen to the both of you! You guys could not be more right. I get the speculation on whats going to get cut, who is going to go under etc. can be a fun game. But at the end of the day it's millions of people's jobs that are at stake. And that is NOTHING you should joke about and applaud.

I really do hope more people and companies look back at these times we are in and budget, save for the unexpected times. 12 years after the 08 recession here we are in a worse downturn. These are inevitable. What forum they may come in is unknown. But at this moment we all know companies and families that are struggling. Some because of there own doing, some because of circumstances out of there control. It just shows you to not take anything for granite. And to always have that "rainy day fund" in your back packet if possible. The airline industry will bounce back, it always has. I have no problem with forecasting what airlines, suppliers etc might not return. But let's not "cheer" for a company to die. Just because you do not like an airline or manufacturer does not mean others share that feeling as well. I know there are many people who work for those companies that read these forums and that is there careers.
 
ewt340
Posts: 1273
Joined: Tue Jul 10, 2012 7:22 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 2:57 pm

ShinyAndChrome wrote:
LCDFlight wrote:
LJ wrote:

The current bail out makes sense as it would have wiped out most if not all airlines, something you probably don't want as a government. However, that doesn't mean they need to be supported indefinitely.


I understand that argument, so let me try to reply.

1. If all Big 4 airlines liquidate, there are plentiful experienced ATP looking for a job, eager to work.
2. If all Big 4 airlines liquidate, there are many well maintained fleets looking for an assignment ASAP.
3. "", there are expert airline HQ staff ready to set up an airline.
4. New airlines can be set up in weeks, if there is demand going unserved.
5. During liquidation, the needed regulatory pieces would be available for sale - maintenance certificates, training, etc.

There are many things to worry about, but insufficient airline capacity is not something the US ever needs to worry about. People who worry about that don't understand.


Weeks? Are you serious? An airline isn't like an ice cream sundae. You can't just expect to mix labor and aircraft together and have it come out instantly. Between setting up reservations and IT infrastructure, developing training and operational protocols, maintenance audits, distribution contracts, let alone all of the legal and regulatory paperwork, starting an airline easily takes well over a year, closer to two or three. So if the entire industry collectively went bust, as it would have absent CARES, you'd be looking at the US not having domestic air service for a number of years at least. And that's assuming that anyone would want to invest in an airline startup right now when the bottom has fallen out of the rest of the economy.


If the entire American aviation sector goes bust. The government would chose at least 1 airline to be revived (a.k.a. being bought up by the government for a single purpose of connecting American cities).
Unlike previous airlines who kept buying their shares back until they ran out of money. The government own/run airlines would be there to provide affordable tickets rather than massive profits.

Although. I see airlines getting desperate and ask the government for a bailout while giving the government significant percentages of shares and control to the Government. Rather than going bust.
 
frmrCapCadet
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Joined: Thu May 29, 2008 8:24 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 2:59 pm

Almost all religions discuss and deal with the apocalyptic. Plagues were one of them. For the Native Americans the age of discovery was one. For Russians the most recent was the rise and fall of the USSR. For the Jews, the Holocaust. WWII was an inversion of one, we knew we would come out on top, not so for much of the rest of the world. For those with a strong historical sense it is obvious that little in human life is 'just normal'. After WWII we in the US really came to believe that we were in control - of nature, of other nations, and of ourselves. Such control always was a fiction. The world and reality have broken through. Salvation depends upon obscure science labs coming up with magic chemicals - and we all are hoping, or praying, or predicting not only that it will happen, and even when it will happen. All just lovely fictions. An apocalypse is here. There are any number of ways of dealing with it. Choose your fiction. Mine is we will solve it and find the magic salves.


"a·poc·a·lypse
/əˈpäkəˌlips/
Learn to pronounce
noun
noun: Apocalypse; noun: the Apocalypse; noun: apocalypse; plural noun: apocalypses
1.
the complete final destruction of the world, as described in the biblical book of Revelation.
(especially in the Vulgate Bible) the book of Revelation.
singular proper noun: Apocalypse
2.
an event involving destruction or damage on an awesome or catastrophic scale.
"a stock market apocalypse"
Origin

Old English, via Old French and ecclesiastical Latin from Greek apokalupsis, from apokaluptein ‘uncover, reveal’, from apo- ‘un-’ + kaluptein ‘to cover’."
Buffet: the airline business...has eaten up capital...like..no other (business)
 
MIflyer12
Posts: 8256
Joined: Mon Feb 18, 2013 11:58 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 3:09 pm

HNLSLCPDX wrote:
This has to stop, these predictions and guessing games need to stop. I hate this guessing game by people here on a.net of which airlines might go under or the predictions from these “experts” such as the Boeing CEO. As an employee of one of the major US airlines, I would hate to see any of these airlines go under. Peoples lives, how they support themselves and their families, etc., depends on them having jobs. I’m not pretending that the worst could happen and an airline could go under, but to play the guessing game on this forum and make silly predictions while going on very little facts and going off emotions while people’s lives get flipped upside down, destroyed or ruined when the loss of of job happens or the economy tanks is foolish.


This is silly. The forum exists for speculation, opinion, and the occasional citation of fact. If you wanted nothing but source-verified facts you would cut out 95% of the posts of a.net any day of the week.

I'm not gleeful at the idea of furloughed MIA pilots being ground under the heel of a crappy Florida Unemployment Insurance system, but it's naive to think a bankruptcy or liquidation of one (or more) of the ten DOT-reporting marketing carriers can't happen. Posting about it here doesn't make it any more likely.
 
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NWAESC
Posts: 1602
Joined: Thu Aug 30, 2007 1:02 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 3:13 pm

HNLSLCPDX wrote:
This has to stop, these predictions and guessing games need to stop. I hate this guessing game by people here on a.net of which airlines might go under or the predictions from these “experts” such as the Boeing CEO. As an employee of one of the major US airlines, I would hate to see any of these airlines go under. Peoples lives, how they support themselves and their families, etc., depends on them having jobs. I’m not pretending that the worst could happen and an airline could go under, but to play the guessing game on this forum and make silly predictions while going on very little facts and going off emotions while people’s lives get flipped upside down, destroyed or ruined when the loss of of job happens or the economy tanks is foolish.


+1

I mentioned it on another thread, but it’s almost as if some posters are excited to see a carrier fall.
"Nothing ever happens here, " I said. "I just wait."
 
MIflyer12
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 3:20 pm

ewt340 wrote:
If the entire American aviation sector goes bust. The government would chose at least 1 airline to be revived (a.k.a. being bought up by the government for a single purpose of connecting American cities).
Unlike previous airlines who kept buying their shares back until they ran out of money. The government own/run airlines would be there to provide affordable tickets rather than massive profits.


There's no precedent for nationalization of a major industry in modern American economic history. (Truman tried with steel and lost in the Supreme Court.) America just doesn't work that way - even the biggest, most important projects get contracted out to corporations. If one of AA/DL/UA stops flying (stops flying, not just entering Ch 11), the Feds will ensure that the other two don't, to assure competition and intercontinental connectivity. There will be multiple domestic carriers. If carriers and government think that there's going to be a significant, long-term contraction of demand there needs to be some painful changes in the industry. You can't expect the government to freeze it in place (it: carriers, aircraft, 100% of staffing) at a cost of $100+ billion a year
 
WorldFlier
Posts: 391
Joined: Wed Aug 05, 2015 2:10 pm

Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 3:37 pm

Nicknuzzii wrote:
Serious question. Is this thread a joke? AA is not going anywhere anytime soon.


I don't think anyone here really thinks American Airlines will declare Chapter 7 (because liquidation of currently worthless airplanes is worthless), but they're the weakest (financially) of the Big 4 and most likely to declare Chapter 11 first.
 
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Midwestindy
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 3:44 pm

NWAESC wrote:
HNLSLCPDX wrote:
This has to stop, these predictions and guessing games need to stop. I hate this guessing game by people here on a.net of which airlines might go under or the predictions from these “experts” such as the Boeing CEO. As an employee of one of the major US airlines, I would hate to see any of these airlines go under. Peoples lives, how they support themselves and their families, etc., depends on them having jobs. I’m not pretending that the worst could happen and an airline could go under, but to play the guessing game on this forum and make silly predictions while going on very little facts and going off emotions while people’s lives get flipped upside down, destroyed or ruined when the loss of of job happens or the economy tanks is foolish.


+1

I mentioned it on another thread, but it’s almost as if some posters are excited to see a carrier fall.


Crazy to see posters rooting for another airlines demise, just so they can see their favorite airline prevail. Pretty twisted logic if you ask me.....when hundreds of thousands of jobs are at stake.
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Mboyle1988
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 4:45 pm

Sooner787 wrote:
winginit wrote:
Opus99 wrote:
I thought it would be AA. I wasn’t sure for a while


You know I never thought we'd see another carving of the cooked pig like we did with Pan Am but here we are. Let's see here...

- United bring your plate right over here we're going to give you the rest of ORD, yes congratulations on your new fortress hub
- Delta there you go step right up here's your significant slice of LAX get it while it's hot and here's some JFK to top you off
- Southwest here you go son you enjoy that steaming slice of Phoenix heat


I was thinking the same thing, If AA files CH 11, they get carved up like you said,

with UA and DL taking over the best hubs. I can imagine quite a dogfight for the MIA hub and their
S. American hub.

I could also see UA taking the chance to bolt from Chicago and set up a new HQ in AA's palatial new campus that
was recently completed. Cost of living and taxes are a helluva lot lower in Texas then ORD


CLT makes money, but Charlotte is not a huge city and has relatively low O&D. Obviously Delta would not be interested. UA might be, given their lack of SE Hub.
DFW makes money and has a large O&D base. That would make sense for Delta to take over.
I am sure UA would love ORD, but I'm not sure the DOJ would allow it, or for DL to take over AA's flights at JFK and LAX.
MIA loses money. Most South American countries were in economic distress long before COVID. There is tremendous pricing pressure from FLL. I'm not sure that would be the prize. Honestly, I cannot see MIA remaining as a connecting hub for anyone, although it would continue to have a major O&D presence and substantial international flights.
PHX would not make sense for either DL or UA, and I don't think the DOJ would mind WN expanding their presence. Realistically, however, I don't see a major expansion from WN (as much as I, a Phoenician, would love that). I would expect the resulting WN operation would be 30-50% bigger than its historical operation, which would result in a major decrease in traffic for PHX.
PHL would probably see the most dramatic decline in traffic, however. The hub doesn't make sense for either DL or UA, and the O&D market isn't as substantial or as high yielding as the other Acela cities. I actually could see B6 making a major move.

I would think DCA would be the prize. It is highly profitable and has a huge O&D demand. That would be the dog fight.
 
Runway28L
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 4:58 pm

Unsurprisingly, several customers are not happy with Calhoun. Particularly AA and UA:

Boeing Co. Chief Executive David Calhoun’s prediction of a major U.S. airline’s demise has prompted complaints from some of the plane maker’s biggest customers as they grapple with fallout from the coronavirus pandemic, people familiar with the matter said.

American Airlines Group Inc. CEO Doug Parker called the Boeing chief this week to express surprise and disappointment after Mr. Calhoun told a television interviewer that a major U.S. airline would most likely go out of business by this fall, one of these people said.

Mr. Calhoun’s comments weren’t well-received at United Airlines Holdings Inc. either, people familiar with the matter said. United also conveyed displeasure to Boeing over Mr. Calhoun’s remarks, these people said.


Meanwhile, Boeing claims some airlines have “appreciated him telling it like it is”.

https://www.wsj.com/articles/what-did-h ... 1589472539
 
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STT757
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 6:04 pm

MIflyer12 wrote:
ewt340 wrote:
If the entire American aviation sector goes bust. The government would chose at least 1 airline to be revived (a.k.a. being bought up by the government for a single purpose of connecting American cities).
Unlike previous airlines who kept buying their shares back until they ran out of money. The government own/run airlines would be there to provide affordable tickets rather than massive profits.


There's no precedent for nationalization of a major industry in modern American economic history. (Truman tried with steel and lost in the Supreme Court.) America just doesn't work that way - even the biggest, most important projects get contracted out to corporations. If one of AA/DL/UA stops flying (stops flying, not just entering Ch 11), the Feds will ensure that the other two don't, to assure competition and intercontinental connectivity. There will be multiple domestic carriers. If carriers and government think that there's going to be a significant, long-term contraction of demand there needs to be some painful changes in the industry. You can't expect the government to freeze it in place (it: carriers, aircraft, 100% of staffing) at a cost of $100+ billion a year


It already has, Amtrak was created when the passenger rail business in the US went under. Conrail was created when several railroad's freight operations were about to cease operations:

Pennsylvania Railroad, New York Central (PennCentral), Erie and Lackawanna Railroads.

Conrail:
https://en.wikipedia.org/wiki/Conrail

Amtrak:

https://en.wikipedia.org/wiki/Amtrak
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Miamiairport
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 6:15 pm

Bottom line is that the Big 6 will either be kept alive via the Chapter 11 process or have their routes, hubs and FF programs divvy up by the other large airlines, supported by government backed loans. The losers would be airliner lessors as relatively few of the planes would be needed and of course the workers as fewer will be needed and no acquiring airline is going to take on other employees if they have their workers on furlough.

It's not doom and gloom, this is reality.
 
alfa164
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 6:18 pm

notdownnlocked wrote:
So if AA hits the skids I for one will not shed a tear. I live in the DFW area and I am old enough to remember what they did to Braniff. I had family members working there too. It has just taken karma a long time to return.


I was in the DFW area then, too, and I remember that. I made a few observations here:

viewtopic.php?f=3&t=1444857&p=22169629&hilit

Payback is hell, isn't it?
Last edited by alfa164 on Thu May 14, 2020 6:24 pm, edited 1 time in total.
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Revelation
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 6:19 pm

Miamiairport wrote:
Bottom line is that the Big 6 will either be kept alive via the Chapter 11 process or have their routes, hubs and FF programs divvy up by the other large airlines, supported by government backed loans. The losers would be airliner lessors as relatively few of the planes would be needed and of course the workers as fewer will be needed and no acquiring airline is going to take on other employees if they have their workers on furlough.

It's not doom and gloom, this is reality.

The losers would mainly be the shareholders. Given many of the airline executives get paid via stock bonuses and can't really sell without looking disloyal to their own companies, they take a big hit during BK which of course means they will do whatever they can do to avoid going into BK. Also pension funds tend to hold a lot of airline stock, lord knows why. Hopefully they dumped it all the minute they heard of the Wuhan Flu.
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Opus99
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 7:16 pm

Why are airlines upset because he’s telling the truth. I mean if the shoe fits sorry about that. I’d rather he tell it like it is. Boeing has needed that for a while. Would they rather he sell them dreams?
 
2175301
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 8:24 pm

WorldFlier wrote:
I don't think anyone here really thinks American Airlines will declare Chapter 7 (because liquidation of currently worthless airplanes is worthless), but they're the weakest (financially) of the Big 4 and most likely to declare Chapter 11 first.


I agree with this assessment. However, I also think that if AA (or anyone) enters Chapter 11 that it has a very low chance of emerging on the other end. I believe given the current situation that the creditors will not see any overall value in funding a restructuring and may see more value in allowing a liquidation and boosting of the other airlines, and the creditors will move it to Chapter 7.

Also, I think all the other airlines are waiting for someone else to go into Chapter 11 first; and then they will wait to see if they are liquidated via Chapter 7

A reality is that if an airline is liquidated (any airline), that the others will be able to pick up the market share and passengers will still be able to get service.

Then after the liquidated airline's market and remaining assets are absorbed, the remaining airlines can go through Chapter 11 as necessary to restructure.

To summarize my view: I think of the Big 6 US airlines. There will only be 5 remaining after this crises is over; and its highly likely that one will be liquidated. AA just happens to be the most likely candidate for that liquidation due to their overall financial status compared to the others; but, it could be someone else.

I understand the pain that this can cause. I've been laid off due to the company I worked for going under (no formal bankruptcy filing - just closed and sold the unencumbered assets and paid off I think about $0.25 per dollar of debt to the creditors with the building and some equipment going to the bank to allow them to resell).

Have a great day,
 
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 8:56 pm

Opus99 wrote:
Why are airlines upset because he’s telling the truth. I mean if the shoe fits sorry about that. I’d rather he tell it like it is. Boeing has needed that for a while. Would they rather he sell them dreams?


If government intervention wasnt a thing, I might agree.

However there is no way the US government will let AA go under at all.
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smartplane
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 9:10 pm

2175301 wrote:
Also, I think all the other airlines are waiting for someone else to go into Chapter 11 first; and then they will wait to see if they are liquidated via Chapter 7

A reality is that if an airline is liquidated (any airline), that the others will be able to pick up the market share and passengers will still be able to get service.

Then after the liquidated airline's market and remaining assets are absorbed, the remaining airlines can go through Chapter 11 as necessary to restructure.

Airlines are waiting, but most likely financiers and lessors will make the decision. At the moment, everyone is at the top of the cliff, looking, listening, and summoning courage. There are those with multi-airline exposure, who have predicted various scenarios, including the order in which the dominoes fall, and the financial outcomes for their business. For now, fingers and other body parts are crossed, but will it be enough? Boeing could choose a loser and take the first step.
 
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 9:39 pm

jetawayusa wrote:
so... many of you are talking about Chapter11 ...(reorganization)....I am not verse on Bankruptcy laws in the USA....but can companies that have gone thru Chapter11 file again? I know Continental in the past have done so multiple times but...I thought those laws were changed. Can someone with knowledge on US Bankruptcy laws shed some light? Also...doesn't a company NEED quite a bit of Cash to go into Chapter11 since "credit" is no long available and they have to pay cash to operate the "business". And in order to qualify for C11 you need a plausible "reorganization" plan.... How do you have a "plan" when the virus and the world is so uncertain these day??!!



A company that has previously reorganized under Chapter 11 of the U.S. Bankruptcy law can file again, no problem. They will get an initial period of exclusivity to propose a plan of reorganization; if they can do that, it would be approved. However, the Creditors will have a vote and can turn down the proposal. It boils down to which generates more money for the creditors - in today's economy, who knows? TWA's first two bankruptcies were quite close together in time (the third one was when they had a pre-packaged plan proposed which involved them selling their assets to American). Other airlines having multiple Chapter 11's include Braniff (1982, 1989, 1990(?)) and Continental (1983 and 1989, I think),

A Chapter 11 filing would allow a company to reject leases, allowing them to return unwanted leased airplanes, or return financed airplanes without penalty, close stations, etc. If, for example, American's current A330 fleet were owned rather than leased, and if there was little or no equity (the planes are worth less than what they may owe on them), they could rid themselves of those obligations. Same thing with real estate assets (airport facilities, maintenance bases, etc.), but, at the same time, that may also hinder a survival by shrinking the company.

Union contracts are something else. After Frank Lorenzo took Continental to Bankruptcy Court, the law was changed to eliminate the ability of a company to abrogate union contracts unilaterally. However, in today's situation, unions may go along with something to protect jobs rather than see the airline shut down and all jobs be lost.
 
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Midwestindy
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 10:13 pm

Runway28L wrote:
Meanwhile, Boeing claims some airlines have “appreciated him telling it like it is”.

https://www.wsj.com/articles/what-did-h ... 1589472539


Highly doubt any airline is happy about him "telling it like it is." Him doing that does nothing to help them, in fact quite the opposite.

2175301 wrote:
A reality is that if an airline is liquidated (any airline), that the others will be able to pick up the market share and passengers will still be able to get service.


This is a pretty optimistic view in my opinion...I don't know if that would be the case if we are talking about one of the US3.

Airlines will be operating with constrained fleets, and none will have the slack to pick up the liquidated carriers flights for a significant amount of time.

Consolidation is works out that well.
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LAXdude1023
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 10:30 pm

Ive been on this website 14 years and every time it looks like an airline will have to file Chapter 11, the talk is about Chapter 7.

The US government WILL intervene with any of the big airlines before they go under. They will NOT go under because of government intervention alone. If this was a pure free market, they would all be goners.
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alfa164
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Thu May 14, 2020 11:55 pm

2175301 wrote:
I agree with this assessment. However, I also think that if AA (or anyone) enters Chapter 11 that it has a very low chance of emerging on the other end. I believe given the current situation that the creditors will not see any overall value in funding a restructuring and may see more value in allowing a liquidation and boosting of the other airlines, and the creditors will move it to Chapter 7.of debt to the creditors with the building and some equipment going to the bank to allow them to resell).




This. In order to proceed in a successful Chapter 11 case, a debtor must either have a pre-planned financial backing available ("pre-package"), or the creditors must be convinced they can gain more by supporting the continuing operation of the airline than they would by divvying-up its assets. In previous successful Chapter 11 proceedings, most had the pre-package, with banks and/or other institutions ready to supply the monies and lines of credit available for the airlines to emerge successfully.

These days are different. Tell me... if an airline were to attempt Chapter 11 today, which institutions would guarantee the moneys necessary? Who could? The banks are suffering as much as, if not more than, the airlines themselves. Where would the DIP financing come from?

Unless Jeff Bezos decided he wants to own an airline, any Chapter 11 filing is likely to be converted to a Chapter 7. Fast.
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BDubs1170
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Fri May 15, 2020 12:03 am

No major airline is getting liquidated in Chapter 7, where they’d be forced to sell their assets for pennies on the dollar seeing as how we’ll have a glut of supply in the global aviation market for the next ten years or so. I also don’t see the government signing off on a merger amongst any the Big 3 for pricing reasons—the remaining Big 2 would be able to absolutely gouge consumers.

AA is in the most dire situation because of their debt, but I don’t see them going out of business. Too big to fail.
 
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Fri May 15, 2020 3:24 am

BDubs1170 wrote:
AA is in the most dire situation because of their debt, but I don’t see them going out of business. Too big to fail.


This forum is nothing more than a guessing game involving mostly posters not fully understanding the facts. In regards to the statement above which says AA is "To big to fall" the following statement holds some water. The bigger you are the harder you fall. Another thing that could be stated is that Delta's employees, except the pilots and flight dispatchers are non union which means they are "At Will" employees with little or no protection in their ability to remain employed by Delta who can more or less pick and choose who will remain active employees and at with what rate of pay and other benefits. I am NOT making any predictions about the survival of any of the airlines. One other statement I will make is that Boeing is in trouble. They have 400 undelivered 737 MAX aircraft that will need much work completed or reworked before they may be delivered to any of the purchasers. That is assuming that the purchasers are willing and/or able to accept delivery. :old:
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Fri May 15, 2020 4:07 am

LAXdude1023 wrote:
Ive been on this website 14 years and every time it looks like an airline will have to file Chapter 11, the talk is about Chapter 7.

The US government WILL intervene with any of the big airlines before they go under. They will NOT go under because of government intervention alone. If this was a pure free market, they would all be goners.

Exactly. Moreover all these airlines we are talking about were making huge profits if it were not for this crisis. For some reason, fanboys of a particular airline here are obsessed with the idea of portraying other airlines, especially one in particular as some loss-making enterprise which was already heading towards Chap 7; and as if its collapse and the resulting loss of jobs of its employees will be some huge service to mankind. Weird...
 
n7371f
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Fri May 15, 2020 4:18 am

David Calhoun is the most comical, moronic leader I've seen in years. He's leading a company that has its head in its ass and he perpetuated it for years with his role on the BoD. Shut up you arrogant, cocky, crappy leader.
 
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Fri May 15, 2020 4:19 am

n7371f wrote:
David Calhoun is the most comical, moronic leader I've seen in years. He's leading a company that has its head in its ass and he perpetuated it for years with his role on the BoD. Shut up you arrogant, cocky, crappy leader. There is literally nothing with Boeing right now that gives you any ounce of arrogance.
 
Ken777
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Fri May 15, 2020 6:27 am

MohawkWeekend wrote:
Thats a two edge sword - wait till the lawyers sue Airlines on behalf of the estates of workers who got ill and died because of COVID. The Govt needs to put in blanket immunity for everyone including local, state and Federal government.


The airlines understand that spacing of PAX is critical in avoiding law suits. Step 1 was leaving middle seats vacant, Step 2 is leaving every other ROW empty. That gives you a defense.

Now provide N95 masks, good gloves etc,`

Loads go down but so does legal action for packed planes like United flew recently.
 
325i
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Fri May 15, 2020 10:25 am

To my fellow contributor, Connntriutions, my point is "speculations".
Apologies for not responding sooner but one these days has a priority for more important issues.
Thank you for your response .
Cheers 325i.
 
dstblj52
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Fri May 15, 2020 10:45 am

alfa164 wrote:
2175301 wrote:
I agree with this assessment. However, I also think that if AA (or anyone) enters Chapter 11 that it has a very low chance of emerging on the other end. I believe given the current situation that the creditors will not see any overall value in funding a restructuring and may see more value in allowing a liquidation and boosting of the other airlines, and the creditors will move it to Chapter 7.of debt to the creditors with the building and some equipment going to the bank to allow them to resell).




This. In order to proceed in a successful Chapter 11 case, a debtor must either have a pre-planned financial backing available ("pre-package"), or the creditors must be convinced they can gain more by supporting the continuing operation of the airline than they would by divvying-up its assets. In previous successful Chapter 11 proceedings, most had the pre-package, with banks and/or other institutions ready to supply the monies and lines of credit available for the airlines to emerge successfully.

These days are different. Tell me... if an airline were to attempt Chapter 11 today, which institutions would guarantee the moneys necessary? Who could? The banks are suffering as much as, if not more than, the airlines themselves. Where would the DIP financing come from?

Unless Jeff Bezos decided he wants to own an airline, any Chapter 11 filing is likely to be converted to a Chapter 7. Fast.

There is only one institution who could provide the garuantees need for banks to bank airlines or to provide the financing the federal government.
 
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Fri May 15, 2020 12:27 pm

Yeah, the bottom line is, in these incredibly stressful times, just stay away from any topic on Airliners that might cause greater angst. Heck, on here, almost anything posted ends up in some sort of sarcastic, angrily worded exchange. Usually i will see a topic that interests me, such as this one. But after reading the initial post, it's only a matter of a day or sometimes even hours before it turns into a typical---i-hate-this-particular-airline-and-they-deserve-to-fail blog. But, it's up to the moderators to choose what should and shouldn't be posted. I don't watch the news, i'll scan the papers online, i'll read a blog like this until i feel my blood pressure rising, and then it's off to a good book or a movie or something I can lose myself in. Everyone has their opinion, their particular interest and their intelligence level on that interest. I signed up on here years ago because i love commercial aviation. I love airplanes and learning about them. I didn't realize, but i certainly should have expected, that it would end up being an outlet that can be quite detrimental to ones mental state if they are directly involved in the industry. I will remain hopeful that, little by little, normalcy can return. Until then i'll stick to my crosswind landing videos on YouTube! Have a great day everyone and stay hopeful.
 
Boston757
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Re: Boeing CEO: A major US airline likely will go out of business this year,

Fri May 15, 2020 1:11 pm

NWAESC wrote:
HNLSLCPDX wrote:
This has to stop, these predictions and guessing games need to stop. I hate this guessing game by people here on a.net of which airlines might go under or the predictions from these “experts” such as the Boeing CEO. As an employee of one of the major US airlines, I would hate to see any of these airlines go under. Peoples lives, how they support themselves and their families, etc., depends on them having jobs. I’m not pretending that the worst could happen and an airline could go under, but to play the guessing game on this forum and make silly predictions while going on very little facts and going off emotions while people’s lives get flipped upside down, destroyed or ruined when the loss of of job happens or the economy tanks is foolish.


+1

I mentioned it on another thread, but it’s almost as if some posters are excited to see a carrier fall.



I have noticed the same thing. Carving up hubs, dolling them out and speculating on the a windfall for a a particular airlines.
 
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DL747400
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AA's Doug Parker says U.S. Carriers Will Survive Without Bankruptcies

Wed May 27, 2020 11:34 pm

Yeah, he SAYS this, but who actually believes him? Does he really think that people see him as credible? After all, he also said AA would never lose money again. :roll:

Parker Says U.S. Carriers Will Survive Without Bankruptcies
https://aviationweek.com/air-transport/ ... 0dd7947d59

American Airlines Will Never Lose Money Again, Says CEO Doug Parker
https://chiefexecutive.net/american-air ... ug-parker/
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MIflyer12
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Re: AA's Doug Parker says U.S. Carriers Will Survive Without Bankruptcies

Thu May 28, 2020 12:01 am

He added that U.S. airlines are facing a “demand crisis” caused by the COVID-19 pandemic, which bankruptcy cannot help. That’s different than unsustainable costs in an over-saturated environment. “There’s no one trying to push anybody else out of business,” Parker said. “It’s all about demand. We need demand to come back.”

If AA is forecasting that demand (both volume and average fares) is going to be back to 90% 4Q20 and 95% 1Q21, then he may be right. IMHO, there's no way - without a further Federal bailout - that all ten major U.S. carriers will survive without a Chapter 11/7 filing if demand is still off 25-30% into 3Q21. The carriers just don't have the tools to shrink their cost basis that much outside of bankruptcy.
 
UA444
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Re: AA's Doug Parker says U.S. Carriers Will Survive Without Bankruptcies

Thu May 28, 2020 12:07 am

I feel like he means AMR/UAL/DAL survives without bankruptcy. I definitely see at least one smaller carrier filing.

He makes a good argument about the demand problem vs unsustainable costs. The issue is that people are too scared to walk their dog in their neighborhood, let alone get on a plane. And the way some in the media get their jollies reporting this 24/7, I think it’s going to cause massive damage long term.
 
0newair0
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Re: AA's Doug Parker says U.S. Carriers Will Survive Without Bankruptcies

Thu May 28, 2020 12:08 am

Ed Bastian has said the same thing. He doesn't believe any of the large carriers will file.

The carriers don't need demand to come back to 95% of where it was to survive. They just need enough demand to start generating a positive cash flow - which is a much lower demand threshold.
That's not how this works! That's not how any of this works!
 
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Midwestindy
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Re: AA's Doug Parker says U.S. Carriers Will Survive Without Bankruptcies

Thu May 28, 2020 12:18 am

UA444 wrote:
I feel like he means AMR/UAL/DAL survives without bankruptcy. I definitely see at least one smaller carrier filing.


Which smaller carriers? F9, NK, & G4 will be fine as they are leisure focused, and G4 is basically back to breaking even already (same story for NK essentially)

SY has their Amazon Air deal

AS/WN have plenty of cash to last at least a couple years, even if cash burn were to stay at May levels
Last edited by Midwestindy on Thu May 28, 2020 12:21 am, edited 2 times in total.
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Re: AA's Doug Parker says U.S. Carriers Will Survive Without Bankruptcies

Thu May 28, 2020 12:19 am

DL747400 wrote:
Yeah, he SAYS this, but who actually believes him? Does he really think that people see him as credible? After all, he also said AA would never lose money again. :roll:

Parker Says U.S. Carriers Will Survive Without Bankruptcies
https://aviationweek.com/air-transport/ ... 0dd7947d59

American Airlines Will Never Lose Money Again, Says CEO Doug Parker
https://chiefexecutive.net/american-air ... ug-parker/

Roll your eyes all you want. It's easy to bash Parker's "never lose money again " claim when every freaking industry is losing money during this pandemic. Why don't we revisit this claim in 1-2 years.

BTW, your beloved DL is losing a crap ton of money also. Aren't they the best run, most profitable US airline ever? :roll:
Grumpy. Not a dwarf, not an attitude. It's a lifestyle.
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