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Dallas Morning News: AA Could be Bankrupt in May
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Thanks for the link - I'm glad the tone of the artical is that AA is giving the Union all the data it needs for an informed decision - very tough decisions. I would encourage before commeting on this post reading the artical - signing up for the website is painless -
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if they do go bankrupt what happends to all my aa miles???
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Yeah, but the local news outlets in the DFW area has reported bad info before, including the idea that AA is considering rolling back MRTC.
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by elimuli: if they do go bankrupt what happends to all my aa miles???</font> If they go chpt 7 (unlikely)... then unless a buyer comes forth (also unlikely), then you'd lose them all. ------------------ A340s don't fly... they're repelled from Earth by their ugliness! |
This has got to be a worst case scenario. Looking back at 2002 and fourth quarter cash flow figures, assuming 2003 is as bad as 2002 (it shouldn't be since AA has made so many cuts, already), ch.11 would probably come sometime toward the end of Q3 or Q4. I suspect this is to let unions know the seriousness of the situation. Good move on AA's part.
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by askworldtraveler: ...I would encourage before commeting on this post reading the artical - signing up for the website is painless....</font> Here is the first portion of the article: <font face="Verdana, Arial, Helvetica, sans-serif" size="2">AMR could be bankrupt in May Pilots' union says American's parent perilously low on cash 02/26/2003 By ERIC TORBENSON / The Dallas Morning News American Airlines Inc.'s parent company has just three months' worth of cash reserves and could be forced into bankruptcy as soon as May, according to the carrier's pilots' union. The Allied Pilots Association, after completing an independent analysis of AMR Corp. finances, also concluded that the $1.8 billion in annual employee concessions sought by the airline might not be enough to save it. "Realize that the $1.8 [billion] is a minimum figure," a posting on the union's Web site says. "There is no guarantee that AMR won't ask for more. AMR states the alternative is bankruptcy." American spokesman Bruce Hicks said the airline didn't want to comment on specifics of the union's findings. He said American was in productive talks with its unions. "They understand the sense of urgency that we need," he said. The Allied Pilots Association outlined the grim financial picture in board meetings and discussions over the past few days. It issued its findings after getting unfettered access to AMR accounting books and finishing long discussions with American chief executive Donald Carty and president Gerard Arpey. The union said it found that although American began the year with $2.7 billion in cash, $775 million of that is restricted, meaning it couldn't be used to pay bills. That leaves $1.9 billion in the till, but American will be forced to refinance some debt this spring, a move the pilots say will cost $200 million. That lowers the balance to $1.7 billion. The union believes that $1 billion is the minimum American needs to keep operating, a figure confirmed by analysts. United Airlines Inc. entered bankruptcy Dec. 9 with about $800 million in cash, and most analysts think it should have filed far sooner. AMR chief financial officer Jeff Campbell said in January that American was losing about $5 million a day and would continue to do so during the winter, the weakest part of the travel season. By doing the math, the pilots project that American would need to file for bankruptcy May 25.</font> |
Thanks Middle_seat for posting the article. I hate giving out info to DMN, they keep calling last time and it was a pain to get them to stop calling. Have to remember to give out a bogus email...he he he...
So, those unions have the writing on the wall now. Guess my trip to Hawaii for next year will go thru? I won't panic yet but I will plans to use my miles up quicker? |
I'm really worry about my AA miles. I've been saving up for a first class vacation this summer. If they go bye bye and they say bye bye to my miles too, I'll be really p*ssed! I had accumulated a lot of points for at least $500 credits for Olive Garden/Red Lobster/TGI Friday's with NextCard Visa and before I can redeem that $500, NextCard went bye bye. I was really really you know! Ugh....don't want the same thing with AA.
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by DFWRaider: Didn't realize it could be coming this soon: http://www.dallasnews.com/latestnews...zamr.98f3.html</font> actually this announcement is the best bankruptcy-prevention medicine available. IF there is a deal in the works with APA, then AA's bleeding is soon to end. APFA and the others will have little choice but to play ball. IF there is a deal to be done, AA will be in quite a nice position, relatively-- UA still floundering, CO teetering on the brink, DL being bled slowly but surely unto death by DALPA's 42% pilot wage premium through 2005... IF IF IF at least the alternative seems to be unthinkable enough to all sides to get them to be reasonable. [This message has been edited by martin33 (edited 02-25-2003).] |
I went and look up on AA regarding redeeming the miles. You can buy gift certificates and use your AA miles to pay for it. AA will let you have $25 for every 3125 AA miles toward your vacation. That's less than .008 cent per mile. What gives? Is there anyway we can convert AA miles back to hotel points, etc.?
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by lrickets: I went and look up on AA regarding redeeming the miles. You can buy gift certificates and use your AA miles to pay for it. AA will let you have $25 for every 3125 AA miles toward your vacation. That's less than .008 cent per mile. What gives? Is there anyway we can convert AA miles back to hotel points, etc.?</font> the cash value of a mile is about 1 cent. the ticket redemption value varies between 2-12 cents. |
If I am not mistaken, the $5MM per day is "losses," not cash flow. The cash flow loss per day would be less, so May 25th is probably not the date.
Then again, our finance dept does not like us marketing tyes trying to do finance, so I could be wrong! |
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by martin33: your math is off by a factor of 100. .008 dollars is .8 cents. the cash value of a mile is about 1 cent. the ticket redemption value varies between 2-12 cents. </font> |
I mean less than 1 cent.
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