AMR heading towards Bankruptcy?????

[~~~^~~~]

There is "buzz" about meetings with Eagle Management and some ALPA reps regarding sale of all of Eagle, in a fashion similar to Continental's sale of equity to shore up cash position and the under funded pension obligation.

Specifics are not out yet...

 

[G4G5]

What is the importance of 1) an exclusive contract with Boeing and 2) being owned by a French insurance company.

May be obvious to most on this board but not to me.

A-B


In Washington, it's all about political influence. Do you remember how GW flem to his inaguration? On a brand new AA Boeing 737.

When finance's get this big you need to thinking global. UAL has a $900 mill worth of EETC's due (enhanced equipment trust certificates, bonds guranteed by aircraft). $350 mil are due next month. These are due to a Germany bank, they were used to finance French aircraft (airbus).

Are the French helping GW with his Iraq delima? Nope.


Now add in the local pressure, if UAL has to go Ch 11. you can bet that AA will be doing what it can to make things worse. Then their's DAL they aren't about to let UAL off the hook either. DAL and AA have exclusive contracts with Boeing, so no need to guess as to where Boeing will be will be applying its clout when asked.

If GW is given the choice to help AA and DAL or let UAL get away without paying it's bill's($1.9 billion dollar loan) what do you think.

 

[G4G5]

Geeze, I can't edit the above post, it's flew not flem

Anyway, GW can't have a situtation where all 3 of his majors are bankrupt. That's why the political forces (election in 2 weeks) are in play. GW has to draw the line some where. What does GW care if UAL can't make their payment to a Germany bank, being owned by a French insurance company does not help.

As far as a divestiture of Eagle, highly doubtful.
The NASDQ just announced that they would delay their IPO for at least another 6 month. Bloomberg just announced that 3Q02 was the worst quater for IPO's in 23 years. So, what can Carty do with Eagle. An IPO? I think not.

Who would buy an airline in todays economy?

It sound more like he is angry with the Scope clause and can't do a thing.

 

[OakRBust]

Mesaba Holdings would!

 

[eaglefly]

AMR has been breaking their back to maneuver around both the AA pilots and AE pilots contract to allow the continued acceptance of RJ's at Eagle (2-3/month).

Most major carriers see the need for RJ's (NONE in desert).

Why would AMR just give away what they've been hoarding and protecting for the last 5 years (RJ's) ?

The only thing that makes sense is some sort of spin-off that benefits AMR shareholders.

Continued rumors of EMB-170's and eventually 190's. Rumors of more mainline downsizing and furloughs.

No answers, but this week hopefully will provide some signs.

 

[G4G5]

The problem with a spin off is two fold. If Carty tries to spin off 49% of Eagle, he does not get around Scope because he still has the controlling interest. So this idea makes no sence.

If he spins 51% off then he has lost control of Eagle, that's not something that he wants to do. That becomes and IPO and he would receive too much pressure from the BOD. Why an IPO in this economy only to divest an asset?

SCOPE, it has reached a time when he needs to deal with the APA. The simple thing to do is sell Executive in SJU that will get him below the ASM cap but now he has lost control of an asset.

The simplest and smartest thing to do would be to have AA mainline fly the 70-90 seat RJ's. The would eliminate his ASM problem and allow unlimited RJ growth. Their aren't too many furloughed TWA LLC pilots who wouldn't be happy flying an RJ for the new 18 year Comair rates.

He knows this and IMHO all the rumors are just his grumblings while behind the scenes they negotiate

 

[eaglefly]

But that would put AMR at a great disadvantage with competetors who will be flying 70 (and eventually 90) seat RJ's under a regional cost structure. Mainline costs (beyond pilot salaries, there's work rules and retirement - mainline F/A costs - mainline mechanic costs - mainline gate agent costs - mainline ramp costs etc) would remove most of the potential cost effectivness of these A/C.

Comair
ASA
COEX (XJET)
Freedom (ugh!)

-against-

AA mainline

I have difficulty seeing this.

I would like to see mainline expand and grow. There are SEVERAL thousand pilots on the AA list junior to me. But it would go against AMR and Carty's MO.

 

[Fast Eddie]

Once these big carriers go into bankrupcy, A politically appointed federal judge will start running the show. The last time we had a couple of Republican presidents(Reagan & Bush) those of us that worked for now extinct carriers watched these entities get reconstituted. Asset sales, outright liquidation etc, with the depositories being the very entities that are ,they themselves
about to be reconstituted , a morphing if you will, into a hodgepodge of Regionals, super nationals etc with greatly
reduced pay rates and benefit structures. What we are now seeing are the final stages of the Deregulation" Experiment" as
authored by Professor Cahn of Cornell University