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commavia
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Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:03 pm

Now official from AMR:

http://aa.mediaroom.com/index.php?s=43&item=3397



Quote:
FORT WORTH, Texas, Nov. 29, 2011 /PRNewswire/ -- AMR Corporation ("the Company"), the parent company of American Airlines, Inc. ("American") and AMR Eagle Holding Corporation ("American Eagle"), announced that in order to achieve a cost and debt structure that is industry competitive and thereby assure its long-term viability and ability to continue delivering a world-class travel experience for its customers, the Company and certain of its U.S.-based subsidiaries (including American and American Eagle), today filed voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York.


[Edited 2011-11-29 04:32:24 by ManuCH]
 
777law
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:08 pm

Just announced on CNBC ... AMR filing Ch 11, operating as normal.
 
aaexecplat
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:09 pm

Not surprising. I blame incompetent management and clueless unions equally. Let's hope it won't affect those of us who have already booked 6 months of travel on AA for next year, and let's also hope AA stays more or less the same as it was with respect to how they treat us EXPs and the network....
 
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nighthawk
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:12 pm

Apparently they have $4.1 billion in the bank... how can they declare themselves bankrupt if they still have cash? Surely the definition of bankrupt is not having enough money to cover costs?
 
MAH4546
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:12 pm

Finally. In the long run, this will help AA tremendously. Also, even better news: Arpey is retiring.
 
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kc135topboom
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:12 pm

I just saw this on the news, KDFW, Fox4News. There is nothing on their web pages, yet.
 
Lufthansa
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:12 pm

FINALLY!

Now will the Douglas launch a hostile takeover bid?
 
crosswinds21
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:13 pm

Hopefully I'm not the only that, upon reading this, thought "it's about time."
 
mjzair
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:14 pm

And somewhere in Arizona, a guy named Doug Parker is plotting his next move. Good luck to AA and for that matter, the industry.
 
commavia
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:16 pm

By now, this was probably inevitable.

I believe this story is one of immense accomplishment and achievement that AMR and American have been able to remain solvent as long as they have. It is, among many other things, a story of management mistakes, shortcomings and missed opportunities, labor intransigence, and ultimately moral hazard: when every one of AMR's competitors has derived a competitive advantage, in the long run, in a business as competitive as the airline industry, AMR had no choice but to follow suit.

Assuming that AMR is able to survive Chapter 11, which I believe is highly likely, it will be interesting to see what emerges from the process.

I suspect AMR will use the bankruptcy process just as its competitors have done: to eviscerate the union contracts, freeze and or dump pensions and retiree benefits, extract concessions from suppliers and vendors, reject obsolete equipment and facility leases, and build a leaner competitor. I do not anticipate AMR altogether dumping any of its hubs, despite the predictions of some, nor do I personally expect any dramatic changes to AMR's broader network of alliances, short of Eagle, which post-bankruptcy and post-SCOPE is probably going to be getting a lot larger (both in terms of network and aircraft size) - just as has happened with the regionals at AA's post-bankruptcy competitors. Some say a merger is in the cards - either with USAirways or JetBlue. Maybe, maybe not. I suppose only time will tell. I hope AA uses its new competitiveness post-bankruptcy to invest in its fleet (and not just new planes, but refurbishing old ones), just as its competitors - especially Delta - are doing.

I do find it notable that AMR doesn't anticipate DIP financing, and will instead use internal cash on hand. That is pretty novel - I don't think any of AMR's competitors did that in the 2002-2005 range. Will be interesting to see how that may alter the course of the bankruptcy proceedings.

So of course now the question becomes what happens next. Let the speculation begin (or continue, here on A.net) ...
 
VC10er
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:17 pm

I just saw it on the news. Good luck to them and sorry for all those who will suffer from it. But I want them to take delivery of those airplanes and I hope they emerge a better airline!
 
Lufthansa
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:20 pm

Quoting mjzair (Reply 8):

And somewhere in Arizona, a guy named Doug Parker is plotting his next move. Good luck to AA and for that matter, the industry.

Unlike the Delta bid, if he did this, he might get a lot of support from Airbus. With the huge US airways airbus fleet plus everything American have ordered, this would make North America's most important airbus carrier by far. As much as I know people are going to hate it, scream labor issues etc, I think the US would be far better off with 3 large and strong carriers they way Europe has 3 larger and stronger groups, than 6 weak ones. Prices will be kept reasonable by the likes of Jetblue, Southwest and Virgin America. But people must realise, they're not entitled to fly for below cost. That has been a result of cut throat competition. It's nobody's right to obtain a product below the cost it can be produced. They should just think themselves lucky they did it for a while.
 
style
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:21 pm

The press release points out that Arpey is "retiring" and will be replaced by Thomas Horton. Maybe one of the most significant pieces of this filing. Good luck to all at AMR
 
C010T3
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:23 pm

It seems that all our armchair CEOs were right.
I wish that this process doesn't take a big toll on the employees. I hope you all the best.
 
tpaewr
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:25 pm

I think we all knew this was coming. Their moves as of late, new narrow and wide bodies on order, and raising cash. It all pointed this direction. They made a noble enough to avoid this, and they can still claim the title as the last one to fall.


It is gonna be brutal and ugly, but I think AA will be just fine long term.
 
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kc135topboom
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:27 pm

 
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einsteinboricua
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:29 pm

Three words: ABOUT FREAKING TIME!

Seriously, I certainly hope this will help AA in the long run and help it come out stronger.

Now...where are the "AA will never/has no need to file for bankruptcy" crew?   
 
commavia
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:32 pm

Quoting einsteinboricua (Reply 16):
Now...where are the "AA will never/has no need to file for bankruptcy" crew?

Like me, saddened that it has come to this, but resigned to the inevitability of it, and hopeful that the future will be better as a result.
 
kaitak
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:32 pm

Love the humour in the face of disaster: (American will )"continue delivering a world-class travel experience for its customers".

I could certainly see Airbus supporting any effort by US to make an offer for AA, although how Boeing will react is anyone's guess.

What does all of this mean for AA's orders for 77Ws, A32Xs and 737s?

Can we expect to see AA sell chunks of its network (e.g. the t/a routes or L/American network) to other carriers, as PA and AA did in years gone by?
 
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BNE
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:32 pm

And what took them so long, I wonder what pushed them over the edge.
 
airbazar
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:34 pm

I guess all those ancillary fees can only carry you so far, if you don't fix the root of the problem.
 
ltbewr
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:36 pm

Once again, an American based airline has to go to the bankruptcy route for long-term survival in the post-deregulation era. Clearly legacy airlines like AA have a structure as to pensions and labor that is not sustainable in the current era. We are in a serious recession, with long term changes in the American economy, an inability to raise fares due to non-union competition yet stuck with high legacy and fuel costs.
 
idlewildchild
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:37 pm

This news sickens me. All I can think of are my friends who work on the front line at AA and the losses they're about to incur around their pensions and their financial security. I worked with AA '74-78 and have many friends still with the company. They've told me for sometime there's been this vacuous disconnect from the top that didn't exist in the 70s. This whole thing makes me ill and is another indicator of front line workers once again paying a price for something they don't deserve. Of course if you put the responsibility where it belongs, at the top, you're accused of being anti-capitalist, which I'm not. Just sickening that this strategy is being applied with so much cash on their balance sheets.

In any event, I wish all my friends, still working and retired, from AA, the best.
 
commavia
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:38 pm

Quoting kaitak (Reply 18):
I could certainly see Airbus supporting any effort by US to make an offer for AA, although how Boeing will react is anyone's guess.

Perhaps, although I would suspect that at the moment, as things stand now on the day of filing, Airbus will have relatively little influence as a relatively minor creditor. I guess it depends on how those contracts from July were structured, but I suspect other heavyweight creditors will have far more say ... including Boeing.

Quoting kaitak (Reply 18):
What does all of this mean for AA's orders for 77Ws, A32Xs and 737s?

AMR will likely seek to keep all of that intact - if anything, this increases, not decreases, AA's desperate need for those new planes, especially the narrowbody MD80 replacements. Plus, now that the pilot contract is going to be less "negotiated" and more "imposed," getting rates and agreements in place for the new 777s and A320s likely won't be as difficult.

Quoting kaitak (Reply 18):
Can we expect to see AA sell chunks of its network (e.g. the t/a routes or L/American network) to other carriers, as PA and AA did in years gone by?

I think that is very, very unlikely.

Quoting BNE (Reply 19):
And what took them so long, I wonder what pushed them over the edge.

It appears it really was all about the pilot contract - the APA called AMR's bluff, and AMR pulled the trigger. The pilots were always the seminal labor group, and by far the most important - economically and strategically - for the company, because the pilots make by far the most on average of any non-management employees, and because their contract has such a huge impact on so many facets of AMR's operations. After the latest talks broke down after appearing so close, AMR apparently deciding there was little hope of a deal. Now, the pilots - and the other unions - will likely end up with a contract far worse than what Arpey was offering them just a two weeks ago. Unfortunate.
 
flyabr
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:42 pm

Bankruptcy = Final Bargaining Tool. Very Sad! My heart goes out to all you AA employees and your families. Your lives will be irrevocably changed by this court filing and the actions that follow. But, it's only business, right??  
 
AA737-823
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:44 pm

Quoting BNE (Reply 19):
And what took them so long, I wonder what pushed them over the edge.

Getting all of their ducks in a row. I don't fully understand it as well as others here an in the media do, but basically, making sure the orders were made and financing secured BEFORE filing, trying to get the labor groups on board (didn't work completely), getting assets where they wanted them... lots of things that I don't fully understand, but are apparently wise to do when facing ch11.
 
KSMOGene
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:44 pm

Quoting nighthawk (Reply 3):
Apparently they have $4.1 billion in the bank... how can they declare themselves bankrupt if they still have cash? Surely the definition of bankrupt is not having enough money to cover costs?

AMR posted $24.7 billion in assets and $29.6 billion in debt, so even though they have cash in the bank, their liabilities outweigh their assets.

http://www.bloomberg.com/news/2011-1...york-as-talks-with-pilots-end.html
 
idlewildchild
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:45 pm

Quoting flyabr (Reply 24):
Bankruptcy = Final Bargaining Tool. Very Sad! My heart goes out to all you AA employees and your families. Your lives will be irrevocably changed by this court filing and the actions that follow. But, it's only business, right??

     

flyabr: you're sadly, very very right. And even more sadly, in the minority in calling this for what it is, a "Final Bargaining Tool."
 
tayser
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:45 pm

Quoting nighthawk (Reply 3):
Apparently they have $4.1 billion in the bank... how can they declare themselves bankrupt if they still have cash? Surely the definition of bankrupt is not having enough money to cover costs?

SSHHHHH! Stop talking sense.

What a basketcase, the wart on OneWorld's backside.
 
ozark1
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:46 pm

My dad was with AA for 36 years. I have been with them 35. This is truly a sad day, but hopefully, a new beginning. The executive compensation controversy was irreparable, and I knew this would be the outcome, sooner or later. I am numb, not angry. Such a fine company back in the 60's through the 80's. So proud to say that I worked for AA. Now it's something, when asked, that I mutter under my breath. I don't want to have to keep doing that, so I can be nothing but optimistic about the future.
 
idlewildchild
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:47 pm

Quoting KSMOGene (Reply 26):
Quoting nighthawk (Reply 3):
Apparently they have $4.1 billion in the bank... how can they declare themselves bankrupt if they still have cash? Surely the definition of bankrupt is not having enough money to cover costs?

AMR posted $24.7 billion in assets and $29.6 billion in debt, so even though they have cash in the bank, their liabilities outweigh their assets.

http://www.bloomberg.com/news/2011-1....html

I'd like to see the detail on the $29.6b in debt.
 
mogandoCI
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:49 pm

funny how people were complaining there were too many threads of AA's low market cap and labor contract woes and imminent bankruptcy .... then this happened before the year is over

AA has too many non-performing hubs - at least 1 must be streamlined down to a focus city. ORD is the best candidate since DFW can handle the east-west connections fine.

Insufficient connections at JFK due to split JFK/LGA hubs leads of too many 2-stop connections such as ABC-ORD-LHR-XYZ when UA/DL can easily sell you a 1-stop one. (DL has plethora of TATL flights out of ATL/DTW but AA's selection out of ORD/DFW is limited)
 
tpaewr
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:50 pm

Quoting commavia (Reply 17):
Like me, saddened that it has come to this, but resigned to the inevitability of it, and hopeful that the future will be better as a result.

I have been mostly lurking here for over a decade. I know you are an AA fan, employee, or whatever. I know this sucks, but srsly. It is for the best. AA *needs* this, it is gonna be awful, but it will insure AA is still in the sky a decade from now.

I being a CO kid have no such hope. Keep the faith AA will be just fine
 
FlyKev
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:51 pm

It was only time before this happened, and hopefully through Chapter 11 they will be able to sort themselves out.
I rather enjoyed flying with them a few years back to ORD and it would be nice to be able to in the future.

Good luck AA

Kev.
 
bobnwa
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:52 pm

Quoting mjzair (Reply 8):
And somewhere in Arizona, a guy named Doug Parker is plotting his next move. Good luck to AA and for that matter, the industry.

Unlike the pundits on this forum, most airline people consider Doug Parker to be an excellant CEO
 
SCL767
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:53 pm

Quoting kaitak (Reply 18):
Love the humour in the face of disaster: (American will )"continue delivering a world-class travel experience for its customers".

I still can't believe that AA waited this long to enter Chapter 11. It's sad for the many AA employees that may loose their jobs. AA has a crew base here in Santiago de Chile. I wonder if AA will close any of their South American bases, (LAN would certainly hire some of them). Good riddance to AA's CEO! The question is how will AA keep their loyal customers loyal.

Quoting kaitak (Reply 18):
Can we expect to see AA sell chunks of its network (e.g. the t/a routes or L/American network) to other carriers, as PA and AA did in years gone by?

Hopefully LAN and TAM will use this moment to increase flights into both MIA and JFK in order to increase their market-share on routes between South America and the U.S.
 
commavia
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:53 pm

Quoting idlewildchild (Reply 22):
This whole thing makes me ill and is another indicator of front line workers once again paying a price for something they don't deserve. Of course if you put the responsibility where it belongs, at the top

I think that is overly and needlessly simplistic. Unions do deserve some of the responsibility for where AMR is today - both good and bad. The unions were instrumental in keeping AMR solvent as long as it was, but on the flip side, the unions refusal - understandable though it was - to accept reality about where their counterparts at competitors are today is one of the reasons why AMR is where it is. On the flip side, AMR management also deserves tremendous credit for being able to keep the company out of bankruptcy, and still honor all commitments and union contracts, as long as they have - considering the unprecedented challenges of the last decade and the competition from leaner, nimbler post-bankruptcy peers. And management also deserves blame for make several critical mistakes at key junctures in the past few years, missing several enormous opportunities, and mismanaging and/or non-managing important aspects of teh business.

The reality, I believe, is that there is plenty of "blame" to go around, and the recriminations have obviously already begun.

What will be most interesting to watch is not how blame is assigned between management and the unions, but within the unions themselves. Watching those comical TWU "Vote No" videos in the last few weeks, it will be interesting to see what happens when the politicians running the unions have to stand up in front of their members and explain why all the posturing and the promises and the "they're just making it look worse than it is" B.S. has gotten their members a frozen and/or dumped pension, wage cuts, layoffs, and outsourcing, to start with.

Quoting KSMOGene (Reply 26):
AMR posted $24.7 billion in assets and $29.6 billion in debt, so even though they have cash in the bank, their liabilities outweigh their assets.

True, but that's the whole point of bankruptcy - liabilities outweigh assets. The key though is that in bankruptcy AMR is given a window of time with protection from creditors seeking to collect on those liabilities, and during that window, AMR still needs cash to continue operating. With other bankruptcies last decade, most other legacy carriers had to get billions in debtor-in-possession financing from banks in order to keep operating. Since AMR rank up its proverbial credit card bill before it filed, it was able to enter bankruptcy with a huge cushion of cash (have to go back and look, but I think far larger than what competitors had upon filing) that should be enough to weather the bankruptcy process, which will last months if not years.
 
AABB777
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:54 pm

As everyone has said .. finally. This was inevitable and in the end AA will come out as a lean, mean, fighting machine. This will put them in a better competitive position in relation to UA, DL, etc. Better file now and get it over with. The rumors of a filing were getting be too much. AA finally took the path that nearly all of its peers have taken.
 
IADLHR
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:55 pm

I wonder if n the road, maybe ,n an election year, the talk of increasing foreign ownership laws in US airlines to 51% wont come up again. The argument could be that raising the limit would preserve competition in the US rather than have another merger in the US. I am not saying the limit will be raised. Just that the public discussion will start.

As so many have said, this comes as no real surprise. I was looking for it to be in early, 2012.

It will be interesting.
 
TUGMASTER
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 12:59 pm

So here's a question for you.....

Can the pilots choose to go back to a 60day share price & jump ship with their pension intact...?
and can pilots continue to do this for the next 60 days....?
or as i suspect, once BK announced that 60 lock-in deal is null & void...??

Anyone...?
 
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seabosdca
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 1:00 pm

Quoting commavia (Reply 23):
It appears it really was all about the pilot contract - the APA called AMR's bluff, and AMR pulled the trigger. The pilots were always the seminal labor group, and by far the most important - economically and strategically - for the company, because the pilots make by far the most on average of any non-management employees, and because their contract has such a huge impact on so many facets of AMR's operations. After the latest talks broke down after appearing so close, AMR apparently deciding there was little hope of a deal. Now, the pilots - and the other unions - will likely end up with a contract far worse than what Arpey was offering them just a two weeks ago. Unfortunate.

  

A huge unforced error by the APA. I am a strong supporter of unions and collective bargaining, but union leadership can be just as brain-dead as any other leadership. From the outside it appears they let their anger at unjustified executive compensation corrupt their ability to make rational decisions.
 
MAH4546
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 1:00 pm

Quoting SCL767 (Reply 35):
The question is how will AA keep their loyal customers loyal.

This isn't a question at all. As a commentator just said on CNBC, bankruptcy filings have near nil affect on passenger's booking habits. And the most loyal customers are probably more business sense minded and more likely to realize bankruptcy has no significant affect on operations. If anything, AA can use bankruptcy to build a better fleet and stronger, even if possibly smaller, network.

[Edited 2011-11-29 05:01:25]
 
FWAERJ
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 1:00 pm

Sad, but inevitable given AA's debt and labor issues. Like many here, I expect AA/AMR to emerge successfully from Chapter 11, either on their own or as part of a US Airways merger. I also predict that AA will focus even more on the cornerstones while reorganizing.

I will be interested to see how this plays out, and I'm thinking that I might buy an AA/Eagle ticket to support one of my favorite airlines as they reorganize.
 
DashTrash
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 1:03 pm

If only the employee groups had taken concessions years ago to stave off bankruptcy! Oh.... Wait a minute......  
 
ebbuk
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 1:04 pm

Just to be clear. A US company can have 4 billion in cash and still successfully apply for bankruptcy protection from its creditors?

The same said company can also buy new planes from Boeing and Airbus weeks before this action?

Only in America it seems.
 
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gdg9
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 1:06 pm

Looks like the pilots who retired in the past few months did the right thing.
 
crosswinds21
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 1:06 pm

Quoting idlewildchild (Reply 22):
This whole thing makes me ill and is another indicator of front line workers once again paying a price for something they don't deserve.

That depends on which front line workers you're referring to. For example, if you're referring to the non-union gate agents, then I would agree with you. But if you're referring to labour groups like pilots and FAs, then they do, in a way, "deserve" this because it was their unwillingness to accept reality that led to this. Time after time, it has been said that if these unions were being paid reasonable wages in line with reality and in line with competitors, then AA would have been profitable for the last few years. AA itself even recently provided some numbers - I don't recall exactly where or when - that stated how much they would have made in a given year if labour salaries were not inflated.

Quoting idlewildchild (Reply 22):
Of course if you put the responsibility where it belongs, at the top, you're accused of being anti-capitalist, which I'm not.

But it doesn't belong at the top, at least not for the most part. Although management certainly has made mistakes, the ultimate reason for this filing is not "the top."

Quoting idlewildchild (Reply 22):
Just sickening that this strategy is being applied with so much cash on their balance sheets.

Yes, so much cash on their balance sheets, but also nearly $30B in liabilities. Moreover, AA is burning through this cash very quickly. How else do you think they are paying for their continued nine-figure losses quarter after quarter? You have to realise that this cash is being depleted and can only last so long and they can only borrow so much.

Quoting mogandoCI (Reply 31):
AA has too many non-performing hubs - at least 1 must be streamlined down to a focus city. ORD is the best candidate since DFW can handle the east-west connections fine.

AA's hubs are just fine. Again, the reason for this bankruptcy filing is labour costs. Throughout the last few years, if AA's labour costs would have been in line with industry standards, then AA would have been sufficiently profitable. That's it. It's as simple as that. This shows that their network is not the problem.
 
avek00
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 1:07 pm

AA has got their work cut out for them. At a time when many legacy airline front-line workers are seeing pay increases after the brutal early 2000s, it will be tough to demand substantial pay and benefit cuts from AA workers. Also, United, Delta, US Airways, and Southwest are sitting on piles of cash these days, and have the wherewithal and imperative to do everything needed to frustrate AA's emergence from BK in its current form, or at least to drive up AA's reorganization costs and post-BK cost structure.
 
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modernArt
Posts: 528
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RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 1:09 pm

Quoting Lufthansa (Reply 11):
But people must realise, they're not entitled to fly for below cost. That has been a result of cut throat competition. It's nobody's right to obtain a product below the cost it can be produced. They should just think themselves lucky they did it for a while.

As it must be pointed out for the umpteenth time, passengers DO NOT set the fares the airlines charge, they only pay them. Filing bankruptcy falls squarely and firmly on the shoulders of AMR's management and to a slightly lesser extent the employee groups. AMR (and others) have had decades to rationalize their costs, their fleets, et al. - to emulate their peers who can and do operate profitably in the same economic environment.

Funny you mention cut throat competition - this has been a time-honored tradition and often sought after solution operationally at AA.

Quoting ltbewr (Reply 21):
We are in a serious recession, with long term changes in the American economy, an inability to raise fares due to non-union competition yet stuck with high legacy and fuel costs.

Who's fault is that - uh it's AMR's.
 
AABB777
Posts: 586
Joined: Tue Oct 30, 2007 12:05 pm

RE: Official: AMR Files Bankruptcy

Tue Nov 29, 2011 1:09 pm

Quoting mah4546 (Reply 42):
This isn't a question at all. As a commentator just said on CNBC, bankruptcy filings have near nil affect on passenger's booking habits. And the most loyal customers are probably more business sense minded and more likely to realize bankruptcy has no significant affect on operations. If anything, AA can use bankruptcy to build a better fleet and stronger, even if possibly smaller, network.

Fortunately, AA is not in unchartered territory. AA's loyal customers have seen other airlines go down this path with little to no impact on the customer/FFs in regards to flight experience, mileage accumulation, frequent flyer perks, etc. Customers will wake up, see & hear the news of the filing, and continue with business as usual, including booking and flying with AA.

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