Citi files for Credit Card decision before AA leaves bankruptcy court
#1
Original Poster
Join Date: Jun 2011
Posts: 3,522
Citi files for Credit Card decision before AA leaves bankruptcy court
From http://aviationblog.dallasnews.com/2...leave-me.html/
Citibank, which has offered AAdvantage-branded credit cards for American Airlines for a quarter century, said Friday it’s time for American to decide whether it will stay with Citibank after American’s merger with US Airways.
It told the U.S. Bankruptcy Court that that decision would have a big impact on American’s bankruptcy case because Citibank has a big potential claim against the airline.
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EDIT: Sorry for typo in title. Apologies if posted elsewhere, I checked back several pages for a similar thread but did not see one.
Citibank, which has offered AAdvantage-branded credit cards for American Airlines for a quarter century, said Friday it’s time for American to decide whether it will stay with Citibank after American’s merger with US Airways.
It told the U.S. Bankruptcy Court that that decision would have a big impact on American’s bankruptcy case because Citibank has a big potential claim against the airline.
<redacted>
EDIT: Sorry for typo in title. Apologies if posted elsewhere, I checked back several pages for a similar thread but did not see one.
Last edited by JDiver; May 27, 2013 at 7:34 pm Reason: posting copyrighted articles forbidden
#2
Join Date: Nov 2005
Location: Very near SFO
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Very interesting. My churning will be seriously affected if they come to the "wrong" decision!
#3
Join Date: Apr 2012
Location: AL
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Citi flies for Credit Card decision before AA leaves bankruptcy court
Very interesting. It looks like Citi is going to be the credit card provider. AA can't afford the chaos of not doing it.
#4
Join Date: Jan 2010
Location: Stockholm, Sweden + Austin, Tx
Programs: "But, I'm a GLOBALIST guest...."
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really? Isnt bankruptcy precisely for getting out of these kind of agreements and stiffing other folks and businesses with broken contracts and financial losses?
#5
Join Date: Mar 2011
Location: FL
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1 billion in 2009 to purchase airline miles...in the middle of the economic crisis and that bank had 1 billion to fool around with.... that explain where all that government deficit money was spent.
Money to save Wall Street and screw the American taxpayer!
I guess I don't feel that bad about churning cards....maybe I should
Money to save Wall Street and screw the American taxpayer!
I guess I don't feel that bad about churning cards....maybe I should
#6
FlyerTalk Evangelist
Join Date: May 2001
Location: LAX; AA EXP, MM; HH Gold
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For AA, bankruptcy has been all about renegotiating secured obligations and cramming new labor agreements down the employees' throats while paying all unsecured claims at 100%.
The Citi debt is fully secured and if rejected, AA would have to pay or surrender the collateral. AA's plan of reorganization did not propose rejecting the Citi debt - treating it instead as secured debt (properly, IMO).
#7
Join Date: Sep 2011
Location: BOS
Posts: 519
1 billion in 2009 to purchase airline miles...in the middle of the economic crisis and that bank had 1 billion to fool around with.... that explain where all that government deficit money was spent.
Money to save Wall Street and screw the American taxpayer!
I guess I don't feel that bad about churning cards....maybe I should
Money to save Wall Street and screw the American taxpayer!
I guess I don't feel that bad about churning cards....maybe I should
#8
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Join Date: Mar 2012
Programs: US CP ; LH FTL ; *G
Posts: 1,630
Citi has a better and more flexible CC program than Barclays. Hope AA stays with Citi.
#9
Join Date: Mar 2011
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While it's a total longshot, I'm hoping Amex somehow wins AA over.
AX has far more to bring to the table than Citi, and Ax already has club agreements with both US and AA, and elite status on US through the Centurion program.
The Citi cards are all pretty lame compared to offerings from Ax and Chase.
AX has far more to bring to the table than Citi, and Ax already has club agreements with both US and AA, and elite status on US through the Centurion program.
The Citi cards are all pretty lame compared to offerings from Ax and Chase.
#10
Join Date: Apr 2012
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really? Isnt bankruptcy precisely for getting out of these kind of agreements and stiffing other folks and businesses with broken contracts and financial losses?
"Citibank advanced $1 billion to American in September 2009 to pre-purchase miles in the AAdvantage frequent-flier program. The obligation is secured by takeoff and landing rights at airports, airport facilities, route authorities and other assets."
I think losing those assets would be chaotic for AA.
#11
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Funny. No, bankruptcy courts aren't precisely for that. In reorganization, you can get out only of certain kinds of agreements.
#12
Join Date: Oct 2007
Location: San Jose, Costa Rica
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Posts: 1,890
I don't think I've received an AA Citi card offer in the mail since March. They were usually arriving once a month (or so it seemed). Maybe this is why: Citi isn't yet certain the affiliation will continue.
#13
Join Date: Oct 2010
Location: San Diego, Ca
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What stops AA from cutting a deal with AMEX, Barclays and/or Chase, suitor(s) would advance the $1 billion to pay off Citi - possibly more.
Personally, I would LOVE to see Chase replace sh#ttybank.
Personally, I would LOVE to see Chase replace sh#ttybank.
#14
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One of the costs of integrating US and AA will be the buyout to get US out of its obligation with Barclays.
#15
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One wonders if this isn't leverage on US & Parker to commit to Citi pre-merger rather than risk a decision post-merger.