ByrdluvsAWACO

AA needs to file. The unions are just way too unrealistic.

strucklee

Given the situation that exists these days for the airline industry I am seriously considering moving my AA miles into Hilton Honors points. Currently have approximately 300,000 AAdvantage miles that would equate to roughly 600,000 HH points at the current exchange rate. I am looking for some assistance with this decision and was hoping that people could give me the pros and cons of making this move. Thanks for your help in advance.

TimUT78

I'm in the same boat and would like to know what the experts think about that. But if every Aadvantage customer started cashing out or transferring their miles, wouldn't that drive them quicker to bankruptcy?

c1mth0g

I did this several years ago when UA declared bankruptcy (moved half my miles then). My regret is that I didn't move more miles - it is no longer possible to transfer UA miles to Hilton points.

kebosabi

Out of curiousity, what happened to miles at UA, NW, DL, and CO when they declared bankruptcy? Did they all disappear overnight?

c1mth0g

No, they didn't disappear. That was probably because the airlines declared Chapter 11 not 7 (i.e. did not liquidate and stop flying altogether).

Rambuster

What happened ? Absolutely nothing.
Only chapter 7 will make your miles vanish...

mktozd

American Air to Cut `Thousands' of Jobs, Capacity (Update1)

By Mary Jane Credeur and Mary Schlangenstein

May 21 2008 (Bloomberg) -- AMR Corp.'s American Airlines, the world's largest carrier, said it will cut ``thousands'' of jobs as it slashes U.S. capacity and retires as many as 85 jets to blunt surging fuel prices and slowing demand.

AMR plunged the most since 2003 in New York trading, pushing this year's loss in market value to more than 50 percent. The carrier also added a $15 fee to check one bag, the first in the U.S. with such a charge.

Chopping domestic seating by 12 percent ``is the right and necessary thing for American to do with oil at $130,'' said Doug Runte, managing director at RBS Greenwich Capital in Greenwich, Connecticut. The move will help American boost fares, he added.

Today's retrenchment by AMR exceeds steps taken by peers, and comes as analysts predict possible bankruptcies among the biggest airlines amid an 84 percent jump in jet fuel in the past year. Chief Executive Officer Gerard Arpey said the job losses would be in the ``thousands,'' without giving an exact figure.

For this and other related articles on Bloomberg, please visit http://search.bloomberg.com/

kebosabi

Thanks for the info.

In all seriousness AA really needs to get moving on getting rid of those gas guzzling MD-80s and A300s.

strucklee

Agree that chapter 11 will not make miles vanish; however the reason I asked about transferring AA miles to Hilton now is based upon what happened to United Airlines miles (once UAL went chapter 11 transfers of UA miles to Hilton Honors points were no longer allowed). So if economics of air travel are becoming more and more onerous for airlines and the probability of bankruptcy rising with the price of oil I was curious how the Flyertalk experts feel about this transfer from an economic point of view. Value of 1 mile versus value of 2 HH points based upon transfer rate? Hope I made myself more clear this time.

whirledtraveler

My understanding was that the bankruptcy rules changed a while ago and several airlines were seeing advantage in declaring before the change. How much worse will it be for AA now than it would've been if it had declared before?

cparekh

At this point, some of my friends who work in the oil industry say that there is some talk of the oil companies buying airlines. It's not serious talk, but it does convey a point.

c1mth0g

It was a good deal for me with my UA miles years ago. That is because my burn rate for miles is very low (I only use miles to upgrade since I want to be earning miles - I fly just enough every year to make 1k on UA so if some of my regular travel were award travel I may not have enough EQMs). To burn miles I use them on hotels, or give award travel to friends/family.

FWAAA

The major changes were:

limits to the exclusivity period granted to debtors to propose a plan of reorg (to try to prevent UA's three-year odyssey);

limits on executive retention bonuses (tougher to grant without competing job offers in hand); and

shorter timeframe granted to debtors to accept or reject leases.

Would AA be unable to restructure under the changes? Who knows?

My guess is that if AA files, it will be a pre-packaged filing, the duration of which is very short. AA already knows which airplane leases it would reject.

hillrider

Are you sure?

Miles are a liability, and chapter 11 allows you to shed liabilities at will (with the judges' approval). All airlines understood that if they zeroed out the accounts they would lose a lot of customers, their future revenue, and would jeopardize the fact that a FF program is a revenue generator (at least on a cash basis), and therefore kept balances intact. However, I believe that this was a choice of their own volition and not one mandated by bankruptcy rules -- after all, as mileage holders we're unsecured creditors.

Having said that, given that all the same elements are at play, I don't foresee any drastic move; most likely some further devaluation (more fees, more miles needed for same awards, more restrictions, less availability, etc.) in keeping with the trend that a mile saved is an opportunity lost (negative "investment" return).