AA parent company AMR Corp files for Ch. 11 Bankruptcy

[serfty]

Yep,

As in most bankruptcies, CH 11 empowers the trustee to operate the debtor's business. So far so good.

However, in Chapter 11, the debtor, as debtor in possession, acts as trustee of the business, unless a separate trustee is appointed for cause.

 

[el_rooto]

Is the equity likely to be wiped out?

 

[elbarto]

This has been coming for sometime. They've hoarded 4.1bn in cash to get them through this as this was inevitable for them.

Is the equity likely to be wiped out?

Yes, but new shares worth something will be issued eventually.



Sent from my other Apple™ wireless device

 

[casanovawa]

To me (with only a passing knowledge of the situation) it seems like swings and round about with this, yes it might be good for the company, but if bad for creditors and staff i don't see how it can be unambiguously good, especially when you can choose to go into 'bankruptcy' even though you have billions of dollars in cash to see you through it???

Its seems a bit like the the US housing market where everyone could get into debt way above their head and when the going got a bit tough, they bailed out and mailed the keys back... And whilst that also was good for the particular individual involved, how did that work for the rest of the creditors and the economy as a whole as the resulst rippled outwards???

Whatever happened to taking on debt or signing contracts and then lving up to your responsibilities??? The yanks have some funny ideas about some of this stuff and while yes it may help the particular individual/company/investor involved to be able to take risks and then bail out or restructure without to many repercussions, screwing creditors/investors/share holders/staff etc to me can't seem like too good a thing, especially if you can fudge the books to go into 'bankruptcy' without actually being bankrupt???

 

[el_rooto]

US Airways Seen as Possible Merger Partner as AMR Restructures in Court - Bloomberg

The bankruptcy filing today by AMR Corp. (AMR), the parent of American Airlines, may prepare the runway for a merger with US Airways Group Inc. (LCC) as the two seek to become more competitive on size and costs, analysts said.

US Airways, the fifth-largest U.S. carrier, failed in a 2006 hostile bid for Delta Air Lines Inc. (DAL) and in two rounds of merger talks with United Airlines. Chief Executive Officer Doug Parker said in April he saw “one big deal left” in the industry, one involving US Airways, after the purchase by Delta of Northwest Airlines Corp. and the merger of United and Continental Airlines.

“American potentially needs a partner to achieve more scale,” Kevin Crissey, an analyst with UBS Securities LLC in New York, wrote in a note today. US Airways, based in Tempe, Arizona, “may provide that avenue.”

The consolidation of Fort Worth, Texas-based

 

[elbarto]

It should be noted that AA has gotten cosy with JetBlue in recent times. So if AA can get their labour issues sorted, JetBlue could be a potential suitor.

 

[drron]

Changes are coming quickly.Gerard Arpey has resigned as CEO and the chairman Tom Horton has taken on that role as well.
It also looks like the end of the MD80-
http://www.aa.com/content/images/re...nFormforAircraftLessorsLendersandTrustees.pdf

We cannot afford to retain all the aircraft currently in the American and American Eagle​

fleets at their current rates, and so we have no choice but to make substantial​

reductions in the cost of the aircraft which we retain. Moreover, in view of the largenumber of aircraft we have on order from Airbus and Boeing, we also seek to accelerateour fleet renewal strategy and, as a result, we do not require the use of all aircraft​

currently in our fleets

 

[Isochronous]

That was inevitable.
I wish Australia had this form of restructuring option available thru Chapter 11.

You do realise that Chapter 11 statistically produces less business turnarounds and lower returns to creditors, employees and shareholders than voluntary administration though? In fact Chapter 11 is the reason why the US and global aviation markets are distorted - it is artifically preventing the market from rationalising excess capacity.

 

[cove]

The industries I work in have produced dust in Australia from voluntary administrations so the dead duck statistics are almost 100%. Basically the administrator seems to get what was left. On the other hand AMR can re-set some contracts and rework its strategy and/ or merge with others.
How did Ansett go ?? And it was one of about three and not one of many like in the US.

 

[markis10]

AA are shedding some F100s and MD82s on lease, whats the bet the F100s are headed down under!

 

[QF WP]

Read it with interest on FB yesterday and a good video from Tom Horton on AA's FB page.

Never thought that they could remain the only airline who hadn't used Ch11 to better structure their business going forward with long term strategies.

Getting rid on MD80's - yay ! (but I always tend to avoid).

Was a little concerned about my AA points until I read their commentary, so roll on September when my family will happily use them JFK/SEA/LAX.

 

[serfty]

...

Getting rid on MD80's - yay ! (but I always tend to avoid).

...

I actually preferred to travel on them (in WHY) than in the 738/752's.

 

[markis10]

I actually preferred to travel on them (in WHY) than in the 738/752's.

There is always the MD95s, with a few due to arrive in BNE shortly!

 

[serfty]

There is always the MD95s, with a few due to arrive in BNE shortly!

I haven't flown a 717 for quite some time - must be at least 4 years ...

 

[drron]

Maybe this article in the NY Times should be brought to AJ's attention-
http://www.nytimes.com/2011/12/01/o...rlines-a-departing-ceos-moral-stand.html?_r=1

IT seems that every week we hear of a C.E.O. who earned millions from a golden parachute after demonstrating poor business judgment or cutting thousands of jobs with no financial downside for executives. These stories feed the fires of the Occupy movement growing all over the world.
But on Tuesday, we heard something different. American Airlines, once the largest airline in the United States, declared bankruptcy. This is not surprising news for the beleaguered airline industry; what is different is what is emerging from the wreckage. Gerard J. Arpey, American’s chief executive officer and chairman, resigned and stepped away with no severance package and nearly worthless stock holdings. He split with his employer of 30 years out of a belief that bankruptcy was morally wrong, and that he could not, in good conscience, lead an organization that followed this familiar path.

 

[pauly7]

I actually preferred to travel on them (in WHY) than in the 738/752's.

Agreed. Give me a 717 any day.

Loath the 757 and not a huge fan of the 737 either... Pity Aus is full of them!!

Wonder if QFlink will snap anything up... They can't get enough aircraft atm!

 

[eastwest101]

I would suspect that Alliance would at least have a look at the Fokker F100's as they seem quite satisfied with the aircraft. Dunno about the 717's as most of the large operators of these are in the US (except for QF Link), this may affect the marketplace for all used aircraft quite significantly.

 

[drron]

Another good article re the bankruptcy suggesting Eagle will be the big loser-
http://www.aviationplanning.com/Images/AMR Bankruptcy - Time For Reality.pdf

 

[serfty]

Interesting re AEagle - no wonder they could not find a buyer ...

 

[cove]

Serfty, thank you for posting that article on AA and AE.
Having sat at the back of an MD80 by the jet engine window I did finally get my hearing back but I will not do that again no matter how desperate I might get.
Next I won't go on an Embraer either as we were bounced around so much on one going to SLC. The staff and passengers got very frightened that the plane was groaning.
For me it became "hello Delta" out of LAX for that one.
I am still an AA fan for LAX-NYC and Dallas.