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Old Aug 3, 2020, 12:30 pm
  #52  
LAX_Esq
 
Join Date: Sep 2002
Location: LAX
Programs: AA PLT / 2MM
Posts: 2,113
Originally Posted by ethernal
I disagree with that assertion. Yes, US airlines have liquidity in the short run, but cash burn is definitely not sustainable - and it is clear that COVID will be a long drawn out affair (especially in the US). Fighting for survival is definitely the right word to use. They mortgaged their assets in order to survive - once this money dries up, bankruptcy is the next step. Keep in mind that the cash burn rate at the end of Q2 included CARES which expires shortly. Delta's projection of being cashflow-neutral by end of year assumed at least a 60-70% demand recovery by then which is looking increasingly unlikely. They are still fighting for survival.
Let's dispel the notion that a bankruptcy filing means shutting down and going out of business. As we've seen from all the recent airline "bankruptcies," the US Bankruptcy Code is a tool that the US airlines have in their pocket to hit the reset button, restructure themselves, screw over their creditors, and help their execs get rich again. The US government made very clear that it's not going to let the US airlines go out of business. If there's no threat of going out of business, there's no fight for survival. It's just a numbers game.
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