Is AA heading for Chapter 11 bankruptcy?

[drron]

AMR Could Play Bankruptcy Card To Break Labor Logjam - Forbes

American Airlines’ work force is said to rank among the lowest in the industry in terms of productivity and according to management estimates, the airline is at $800 million-a-year disadvantage to competitors on labor costs (See AMR Faces Union Stalemate in Bid for $800 Million Labor Savings).
While competitors have negotiated better deals with the unions through bankruptcy, American continues to honor its expensive labor agreements. The airline has been trying to negotiate new agreements with its union for years now, but the contract negotiations have stalled badly. While labor costs account for about 31% of all operating costs at American, they stand at around 22-23% for Delta and United Continental.

There has been a lot of speculation over at FT about this all based on rumour.But with the financial press picking up the story maybe there is some truth to the rumours.If they do go to Chapter 11 the unions will lose big time.

 

[knasty]

Would Chapter 11 affect the FF program? Looking to top-up before year-end but if there's a risk of losing them I'll think twice.

 

[drron]

Would Chapter 11 affect the FF program? Looking to top-up before year-end but if there's a risk of losing them I'll think twice.

Hasn't happened with other US airlines that have been through chapter 11.

 

[Hubbins]

American Airlines Parent AMR in trouble

The stock of American Airlines parent company AMR tumbled Monday, at one point falling nearly 40 percent, on renewed concerns that the carrier could be headed for bankruptcy protection.

Watch out people time to redeem those points.

America Airlines: AMR Shares Plunge on Bankruptcy Talk - CNBC

 

[serfty]

"Bankruptcy Protection" - Will affect employee salary/benefits and some creditors, not profit making FF scheme.

The airline would continue to operate.

See this FT thread: What happens to AA miles (if) they go Bankrupt?

 

[cove]

Re: American Airlines Parent AMR in trouble

Yes I read about AMR during the night as it was front page on Bloomberg when the shares of American Ailines were down about 40 per cent for the day. Chapter 7 is the Ansett scenario and Chapter 11 is the keep it alive scenario. It would be very unlikely that American would totally stop rather than restructure under Chapter11 so it is highly likely that points held will not be torched.

 

[UP4014]

Re: American Airlines Parent AMR in trouble

Still, this could start a run on using points which could have a knock on to the FF scheme.

 

[NM]

Re: American Airlines Parent AMR in trouble

Still, this could start a run on using points which could have a knock on to the FF scheme.

I am waiting for some nice bonus promotions to entice members to increase their points balance. The FF program, often one of the more profitable aspects of the business, "sells" the points/miles for cash to companies like credit card providers, hotel chains, rental car companies etc. The more people they convince to convert their credit card points or hotel points into AA miles, the more cash is injected into the company. Bring on some nice incentive points transfers I say! One like last year's 30% bonus for hotel points transfers would be great at this time .

Quite a number of US based airlines have been through Chapter 11 bankrupcy protection and this situaiton is nothing new for AA in recent years. So long as they can fund their fleet renewal plans, or revised plans following any restructuring, they will immerge just like other have done. In the end, it gives them a process to remove some baggage and take some tough decisions that would otherwise not be possible.

 

[FlyboyAl]

Rumors of American Airlines and bankruptcy

Just heard over here on FOX News (US) rumors of American Airlines facing bankruptcy.
Apparently share price plunged today (didn't say how much).
All to do with a potential downturn in the industry, and the fact they are carrying heavy debt loads.
I do hope it doesn't happen (yes I know Chapter 11 is not what we call bankruptcy in Oz), as it would not be good for the US, and not good for QANTAS

Just found this
http://www.nytimes.com/2011/10/04/b...op-on-american-airlines-bankruptcy-fears.html

 

[casanovawa]

Re: Rumors of American Airlines and bankruptcy

Weren't they voluntarily considering going into Chapter 11 because it would help them reduce staff costs to be more competitive with other US airlines which had struck better deals with their employees???

 

[FlyboyAl]

It was just mentioned on another channel that they are the only major US airline that has not gone into Chapter 11.
I guess they don't want to be left out :shock:

 

[straitman]

American Airlines faces crisis of confidence as bankruptcy looms.

11 hours ago

Shares in American Airlines parent AMR have fallen by more than a third in the past 24-hours as the embattled carrier faces questions over its future.

To date, American is the only large US carrier not to have sought temporary refuge in Chapter 11 bankruptcy protection – a decision which increasingly looks like a liability.

Yesterday the Fort Worth-based carrier was forced to deny, once again, that it would seek bankruptcy protection against mounting losses.
In a statement, AMR said there was, as yet, “no company-driven news that caused the volatility” in stock market prices, instead blaming “rumours and speculation” for the falls.

At this stage bankruptcy “is certainly not our goal or our preference” AMR added.“We know we need to improve our results, and we are keenly focused as we work to achieve that.”​

 

[drron]

Though AA pilots obviously believe the rumours with over 200 retiring in the last 2 months to preserve their pension benefits.

 

[Danger]

American Airlines teeters on brink after huge selloff | e-Global Travel Media

 

[juddles]

Perhaps the various Qantas staff unions could go over there and "assist". That should help the share price.

 

[drron]

An article that explains the different costs faced by airlines-
American Airlines Saddled With High Costs | TheLedger.com

Would be good if we could get a similiar article re QF costs.

 

[Archphoto]

Got this in my inbox today (might be a rehash):

American Airlines Troubles Suggest Possible Bankrutpcy Or Takeover - Business Travel - Portfolio.com

Comment by Sharon L Nemeth made me think of QF and it's problems currently . . . . . .

 

[Timba-Jet]

Got this in my inbox today (might be a rehash):

American Airlines Troubles Suggest Possible Bankrutpcy Or Takeover - Business Travel - Portfolio.com

Interesting comments in the article about how AA's increased codeshare partnerships with OW makes their passengers see how lacking AA is un their own metal.

Overall wow, we all like to have jibes about AA, but didn't realize they are in such bad shape.

 

[Danger]

Okay. Is it time to use up the AAdvantage miles?

 

[serfty]

Okay. Is it time to use up the AAdvantage miles?

Not really, see post #5.

Chapt. XI would be the best thing to happen ...