AA Ch 11 coming soon

[B727Driver]

Look at it any way you wish, but CH11 made Delta and CAL healthier, fwiw.

At what cost? I can name pensions, pay cuts, scope, loss of benefits and more. Are you ready to give up more?

 

[General Lee]

But first, you might use the threat of Ch 11 to extract labor concessions and loan restructuring. That's the usual routine.

Tom,

Remember GG (or JG) saying "Do it once, do it right." He was saying that for a 30% paycut to stay out of BK. Then, after we got into BK, they asked and got 17% more. A 47% pay cut and a gutting of our contract. BK does suck, and I wouldn't wish it on anyone.


Bye Bye--General Lee

 

[tomgoodman]

Tom,

Remember GG (or JG) saying "Do it once, do it right." He was saying that for a 30% paycut to stay out of BK. Then, after we got into BK, they asked and got 17% more. A 47% pay cut and a gutting of our contract. BK does suck, and I wouldn't wish it on anyone.


Bye Bye--General Lee

Yes, I remember. Had been retired for a couple of years by that time, but kept up with the DALPA forum (until we were booted off). The lesson is that pre-bankruptcy concessions merely shift the starting point for in-bankruptcy concessions. Anything gained in return, like a Bankruptcy Protection Letter added to your contract, can also be voided in bankruptcy. It's become Management's ultimate weapon against Labor.
One reason the pension had to be dumped was that the 47% pay cut would have caused active pilots to receive a smaller monthly check than retirees. That would have been a hard sell.

 

[Full of LUV]

Just keep putting your head in the sand. The us consumer has massive debt with very little savings. The housing market is ready for another dip. The government credit is being downgraded. The debt continues to climb. Social Security and Medicare will be a thing of the past in 15 years. Baby boomers keep raping the country for their own gain (there will soon be no age limit in 121 as with 135/91). We're now fighting 3 wars (who's next) we can't afford. Oil is heading up with no drop in sight. Gas will soon see closer to $5 than $4. Etc, etc....

Happy Easter....

The good news is I just saved 30% by switching my car insurance....

 

[Citjok]

AMR stock is at 5 dollars and change. They are still on the game.

 

[satpak77]

AMR stock is at 5 dollars and change. They are still on the game.

what do you mean ?

 

[LeeRoyJenkins]

How can you declare bankruptcy with 6 billion cash on hand

Sent from my DROIDX using Tapatalk

It will probably cost AMR about $2-3 Billion in cash to finance the BK if they do not want to go the DIP BK route.

That being said I think AMR will file for BK within 18 months. I hope the best for their employees but fear the worst.

 

[nwa747]

Can retiree's elect a cash out option vs the pension? I was just thinking, and I may be way off, but if they file BK would their pension get passed on to the PBGC? If that's the case you could see retirements accelerate.

 

[XTW]

Can retiree's elect a cash out option vs the pension? I was just thinking, and I may be way off, but if they file BK would their pension get passed on to the PBGC? If that's the case you could see retirements accelerate.

Talk to the APA crowd. They think that their A-plan is iron-clad and cannot be touched in a Ch.11 situation. It would be very interesting.

AA retirees can take a lump-sum or an annuity at retirement.

X

 

[nwa747]

The lump some may look appealing right now if you think they are heading to court. Why would you screw your retirement over an extra year or two of flying. I bet you will see many walking away soon. Taking a lump some of 1 million will go much further then some crapy government backed pension bailout.

 

[Taco Rocket]

"cannot be touched in a Ch.11 situation. "
X

hmmmm where have I heard this before?

 

[ex j-41]

I believe you just have to show that AA's operation is unsustainable which is pretty easy to do with the current cash burn.

Labor costs are the highest among the legacy carriers and all three labor groups are ready to strike. Eagle's operating costs are way above those of other feeder ops and their virtually worthless fleet of ERJ's (to which AMR holds the mortgage) cannot be sold for enough to buy lunch for the BOD.

All it takes is a phone call from Arpey to the NMB to "loose the hounds!" and a two day strike will force AMR's hand.

You can't use Ch.11 to dump pension plans but as the only remaining pax airline with a defined benefit pension, it wouldn't be too hard to get the judge to axe that from the new 1113-implemented contract. A frozen pension plan or one managed by the PBGC is far better than a growing DB plan with several thousand soon-to-retire pilots walking out the door with a couple million bucks.

I've felt for a long time that a Ch.11 was the smart thing to do from a management pov. Now, for current management to do it as a prepack in order to keep feasting on the carcass for a few more years is the trick.

TC

Yes Chapter 11. Ditch the retirements and then merge with......
A merger needs too things. High gas prices and BK.

 

[General Lee]

hmmmm where have I heard this before?

No, after the DL BK there were some laws and protections created to stop that from happening again. It is a lot tougher now to dump a pension.


Bye Bye---General Lee