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TWA772LR
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HYPOTHETICAL: If AA goes under...

Tue May 19, 2020 4:42 am

I want to make clear this is just a hypothetical/what-if thread. Disclaimer over.

AA is with out a doubt in the worse financial position of the US3 and analysts (based on another thread citing FT) are saying with almost-certainty that they will enter Ch 11.

Well for the sake of a good-old fashioned a.net armchair debate, let’s just say AA goes out of business tomorrow (God forbid) What will become of their assists? Airplanes? Network and hubs and route authorities? HQ? Simulators? Etc...

My take:
UA takes CLT and ORD and LAX
DL takes JFK MIA and DFW
DL takes the A330s and 321s to solidify the retirement of their 756 fleet
UA and AS and WN take the MAXs and newer 800s
United jumps on the 787s and some 321s and 77Ws to help retire the 756 and replace a good chunk of the 772
Oneworld starts influencing B6 and AS with JVs and even board positions to fill their USA void which leads to an eventual AS/B6 merger
PHX and PHL are the wild cards for me. DL is the next biggest US3 airline in both of those cities but WN is still bigger than DL in both (according to a down and dirty Wikipedia check). I think PHX would be the first primary airport for a city that they would be the biggest at (excluding LAS and BWI) that is/was a US3 hub. DCA would also be a head scratcher IMO.
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LCDFlight
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Re: HYPOTHETICAL: If AA goes under...

Tue May 19, 2020 4:52 am

If AA enters Ch11, it will probably reconfigure its fleet, renegotiate vendor contracts (including labor), and continue operations as American Airlines. It has a good viable business by itself. Other airlines do not need to acquire MORE assets than they already have. almost lol at that. They already have way, WAY more stuff and hubs than they need, at least in 2020.
 
Blerg
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Re: HYPOTHETICAL: If AA goes under...

Tue May 19, 2020 4:55 am

I guess Moxy would focus on their markets, maybe AA's bankruptcy would create an open space for them to put greater focus on primary markets/cities.

Would be cool if that leads to at least a new airline emerging but I doubt that would happen in this economic climate.
 
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NameOmitted
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Re: HYPOTHETICAL: If AA goes under...

Tue May 19, 2020 5:10 am

AS uses its lack of a scope clause to work with OO about talking on as much of their California American Eagle contact as possible.
 
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TWA772LR
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Re: HYPOTHETICAL: If AA goes under...

Tue May 19, 2020 5:27 am

LCDFlight wrote:
If AA enters Ch11, it will probably reconfigure its fleet, renegotiate vendor contracts (including labor), and continue operations as American Airlines. It has a good viable business by itself. Other airlines do not need to acquire MORE assets than they already have. almost lol at that. They already have way, WAY more stuff and hubs than they need, at least in 2020.

AA going under would leave a serious void in the US airline industry. Hubs and aircraft would have to be picked up in such a huge hole to fill the gap. The current pandemic would allow a still-bigger gap to remain but would also allow the non-US3 bigger slices of the pie than during normal times. To help illustrate my point, imagine DFW no longer being a hub and only having ops out of E (US domestic) and D (foreign flag carriers), voids will (by necessity) need to be filled.
Blerg wrote:
I guess Moxy would focus on their markets, maybe AA's bankruptcy would create an open space for them to put greater focus on primary markets/cities.

Would be cool if that leads to at least a new airline emerging but I doubt that would happen in this economic climate.

There will definitely be a lot of aircraft available to help them jumpstart!
When wasn't America great?


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jetawayusa
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Re: HYPOTHETICAL: If AA goes under...

Tue May 19, 2020 5:32 am

Pan Am died of a slow death...piece by piece being sold off.... If AA goes under....they have some very valuable pieces!
1) LHR and slots (B6 can you afford any slots?)
2) Miami Hub and Route rights (UA its yours for the taking) (although DL can also make a play)
3) DFW (DL you need a presence in TX)
4) DCA and landing slots (B6...here is your opportunity)
5) PHL (although not NYC (EWR or JFK)) (ULCC haven)
6) CLT (not ATL) ....neither here nor there
7) PHX (who wants to go head to head with WN)
8) LAX-JFK (B6/DL/UA can fill in nicely) (DL can move in to Term8 JFK's Best)
9) ORD (gates and landing slots) (who wants to go head to head with UA)

To me only the first 4 are truly valuable ....the last 5 Mmmmmm not so much

Let the post BK Chapter 7 begin!! LOL
 
LCDFlight
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Re: HYPOTHETICAL: If AA goes under...

Tue May 19, 2020 5:36 am

TWA772LR wrote:
LCDFlight wrote:
If AA enters Ch11, it will probably reconfigure its fleet, renegotiate vendor contracts (including labor), and continue operations as American Airlines. It has a good viable business by itself. Other airlines do not need to acquire MORE assets than they already have. almost lol at that. They already have way, WAY more stuff and hubs than they need, at least in 2020.

AA going under would leave a serious void in the US airline industry. Hubs and aircraft would have to be picked up in such a huge hole to fill the gap. The current pandemic would allow a still-bigger gap to remain but would also allow the non-US3 bigger slices of the pie than during normal times. To help illustrate my point, imagine DFW no longer being a hub and only having ops out of E (US domestic) and D (foreign flag carriers), voids will (by necessity) need to be filled.


Well, I agree.. which is why I said the bankruptcy court would keep AA's assets flying in its network, because it is a viable thing, even if it declares chapter 11. Please keep in mind that this really happened in real life, not that long ago. AA continued to operate thru a bankruptcy. So did Delta. So did UAL.
 
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TWA772LR
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Re: HYPOTHETICAL: If AA goes under...

Tue May 19, 2020 5:42 am

LCDFlight wrote:
TWA772LR wrote:
LCDFlight wrote:
If AA enters Ch11, it will probably reconfigure its fleet, renegotiate vendor contracts (including labor), and continue operations as American Airlines. It has a good viable business by itself. Other airlines do not need to acquire MORE assets than they already have. almost lol at that. They already have way, WAY more stuff and hubs than they need, at least in 2020.

AA going under would leave a serious void in the US airline industry. Hubs and aircraft would have to be picked up in such a huge hole to fill the gap. The current pandemic would allow a still-bigger gap to remain but would also allow the non-US3 bigger slices of the pie than during normal times. To help illustrate my point, imagine DFW no longer being a hub and only having ops out of E (US domestic) and D (foreign flag carriers), voids will (by necessity) need to be filled.


Well, I agree.. which is why I said the bankruptcy court would keep AA's assets flying in its network, because it is a viable thing, even if it declares chapter 11. Please keep in mind that this really happened in real life, not that long ago. AA continued to operate thru a bankruptcy. So did Delta. So did UAL.

I agree and see your point. It for a good old fashioned what-if thread, this is about AA ceasing to exist totally.

Not trying to be mean. :)
When wasn't America great?


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enilria
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Re: HYPOTHETICAL: If AA goes under...

Tue May 19, 2020 11:08 am

In my opinion the government will not allow them to liquidate. The Treasury would probably guarantee a loan to be used as DIP financing. Also, the other airlines have no money to buy the pieces which lowers the bar for them to reorganize.
 
zrs70
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Re: HYPOTHETICAL: If AA goes under...

Tue May 19, 2020 1:45 pm

I just hope my lifetime Admirals Club membership will be picked up!
20 year airliners.net vet! 2000-2020
 
bfitzflyer
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Re: HYPOTHETICAL: If AA goes under...

Wed May 20, 2020 12:43 am

Ok, going to bite, although I don't think liquidation will happen

1) JFK - B6 -solidfy jfk
2) DCA - DL or B6 keep DC market competive
3) CLT - WN don't have to compete at ATL with DL
4) MIA - DL - LATAM
5) DFW - DL - could use TX hub
6) ORD -UA - only one for UA but probably #1 on bottom line as competition gone
7) LAX - B6 - get the West coast hub
8) PHX - AS - if anyone, WN could probably just grow here
 
DFW17L
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Re: HYPOTHETICAL: If AA goes under...

Wed May 20, 2020 1:04 pm

Image
 
stlgph
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Re: HYPOTHETICAL: If AA goes under...

Wed May 20, 2020 6:24 pm

The better deal if it reaches that point would be a pre-packaged Chapter 11 deal saving time and money in reorganization costs and operations under protection, since right now the biggest problem is income cash flow. A pre-packaged Chapter 11 filing would open up paths to renegotiating debt with creditors.

The end results would be mostly seen on paper and on the books and not even remotely close to 99% of the ideas posted in this thread. And speaking of that, a lot of people here need to learn the difference between Chapter 7 and Chapter 11.
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TangoandCash
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Re: HYPOTHETICAL: If AA goes under...

Wed May 20, 2020 8:41 pm

Assuming for this hypothetical that AA liquidates, what major (or minor) airline would be willing/able to buy the airplanes? Even at fire sale prices, when all the majors have big portions of their fleets parked, why buy more to have them parked too? Maybe Delta to replace some of their older used frames with newer, less used frames?

With AA out of the way, I hope Delta moves into DFW big time. I've had much better experiences with them on average than with AA, I just despise connecting through Atlanta.
 
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DocLightning
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Re: HYPOTHETICAL: If AA goes under...

Wed May 20, 2020 10:14 pm

1) I doubt that the brand (or at least the name) of "American Airlines" will be retired. Then again, "Pan Am" is now a freight rail line in the Northeast so go figure. But it's also likely that the brand might be purchased by some smaller airline (AS or B6?) and built into a global carrier again. Stranger things have happened. Remember that podunk little start-up LCC America West? They're AA now.

2) It would defintely leave OneWorld in quite a quandry. Without a US major, they'd be in a major pickle.
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Ken777
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Re: HYPOTHETICAL: If AA goes under...

Wed May 20, 2020 11:15 pm

If AA files how long will it take for others to follow?

IIRC the last time AA files one big reason was the loss of competitive positions from the others filing first. With a true Recession (or Depression) heading our way full speed all airlines should be working the numbers of a lot of alternatives - and fairly organized to follow.

At the same time the "Administration" should be looking very hard at avoiding Ch 11 finings of companies important to our long term economy - just as they need to be looking at actions that address the issues the lower and middle classes are.
 
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KLMatSJC
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Re: HYPOTHETICAL: If AA goes under...

Thu May 21, 2020 12:01 am

bfitzflyer wrote:
Ok, going to bite, although I don't think liquidation will happen

1) JFK - B6 -solidfy jfk
2) DCA - DL or B6 keep DC market competive
3) CLT - WN don't have to compete at ATL with DL
4) MIA - DL - LATAM
5) DFW - DL - could use TX hub
6) ORD -UA - only one for UA but probably #1 on bottom line as competition gone
7) LAX - B6 - get the West coast hub
8) PHX - AS - if anyone, WN could probably just grow here


1) JFK - B6 or DL--someone will want those slots
2) DCA - DL--this will be a big void, but I see DL moving in
3) CLT - WN--this would really be the only one I could see taking over as much as possible
4) MIA - DL--WIth the new LATAM JV, this is a no-brainer
5) DFW - DL, NK, B6--I could see DL taking back DFW, NK expanding, and B6 wanting a mid-continent hub
6) ORD - UA, NK, F9--expansion of all airlines
7) LAX - AS, UA, NK--everyone wants LAX gates
8) PHX - WN, F9--I can see F9 really wanting a new base in PHX. WN would take over AA's old gates and F9 moving to the south side of T4

Moxy is a wild-card. I could see them start up shop in CLT with AA gone too.
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