AWA money situation

[Full of LUV]

AA = Fun Suck

You are crazy. Southwest is fine. They will always be fine. There is no way they will ever loose money, and they are hiring like crazy! Best place in the world to work!!!

[Fade to 5 years ago and replace the word "Southwest" in the above sentence with AA, DAL, USAIR, UAL, etc....]

That may be your opinion, but I don't think AA was ever the "Best Place in the world to work!!!" AMR knows how to suck the fun out of the best jobs.

 

[Cactus73]

Right on Noserider. The "legacies" are in a life or death struggle to match costs with LCCs with typically younger fleets (and usually one type of aircraft), younger work forces, and domestic only operations. Cactus wants to say his airline is being pulled down by U and UAL. That's ironic because I'm sure a lot of pilots on the other side would say the same about LCCs - not productive to point fingers either way. There seems to be a lot of resentment for the legacies having to adapt to the new model. That's the way it is - 2 in Ch11 now, I'm sure more to come, and in my opinion all the legacies will have to see Ch11. Unfortunately I don't think the legacies are going to be the only ones to visit bankruptcy, so you may want to be humble with what you say.

Cactus, do you really think any of the legacy airlines control domestic pricing? You use Frontier as an example. According to their latest press release, they have roughly 20% more seats Jan 2005 than Jan 2004. Meanwhile United has gotten rid of 2 and a half times the Frontier fleet, and then dropped domestic seats another 14% this Jan. Good luck to you.

I think you are being a little over sensitive here. Humble? My airline lost almost $90 million last year, I'm not doing any bragging here.

The fact is, airlines in BK court aren't paying all their bills. Frontier made a large non-Denver expansion last year in an attempt to move revenue away and find new opportunities. My airline did the same and we all failed. The legacies set the price. When we started LAX-JFK transcons they offered their customers a free ticket WORLDWIDE with the purchase of a $198 roundtrip fare. They used your pay cuts to pay customers to fly your airlines. We lost our shirts too and pulled out of the market.

Good luck to me? Good luck to all of us. I don't want to see you on the street and I certainly don't want to be on the street either. Just because I believe that United and USAirways are using the BK court to price their product below cost doesn't mean I want to see you lose your job. The legacies aren't setting price? Are you joking? USAirways ran one of the largest web sales in their history at the beginning of January selling seats from the NE to Florida for $49. It raised a lot of operational cash for them but it is going to probably cost them more to provide the service than the money they took in. Southwest matched these fares because they can make money on this fare due to their fuel hedges.

Legacy CEO's have also been using the BK court to attack labor. They drag their companies into the courts and have been sucking every last dollar out of you guys. They have no business plans of their own but to lower their costs. At the same time Tilton and Lakefield are stuffing their pockets with huge salaries and golden parachutes.

As for AWA early 90's BK filing and the ATSB loan. AWA did sit in BK court during the early 90's for really stupid decisions made by the founding President and CEO. AWA paid for this dearly with a balance sheet that remains highly in debt at the junk bond level and a fleet of 737's and 757's that we couldn't give away. When SWA expanded in the 90's, AWA hobbled along and grew with MESA RJ's. I'm sure AWA did no favors for the industry while they were in BK court with all their 50% off sales.

As for our ATSB loan. We got the loan right after 9/11. On September 11th, AWA's CEO was set to place a huge order with Airbus and detail a major expansion. Many will argue that prior to 9/11, United was already on a downward spiral. We along with quite a few other airlines (USAirways included) got the loan. They are terrible loans. Very high interest rates and we had to give up a lot of stock. Not to mention the loan severly hamstrung ALPA from getting any big wage increases. We are currently making very large quarterly payments to the ATSB.

I don't mean to hijack this thread but someone asked about the health of AWA and I don't think it is wrong to discuss the pressures on the non-BK airlines.

It is quite possible we will be in BK court next year ourselves so I have no idea what you mean that I should show some humbleness.

 

[PHXFLYR]

Cactus 73;


Do you know when then next ATSB loan payment is due and how much?
Also what is the balance remaining and the interest rate? Thnx..

PHXFLYR

 

[GogglesPisano]

PHXFLR,

You are one of the classiest, most articulate posters on this board.

Cheers!

 

[PHXFLYR]

PHXFLR,

You are one of the classiest, most articulate posters on this board.

Cheers!

To quote that "waskillee wabbit" himself ,Bugs Bunny...


"He don't know me very well, do he ??"


But thanks anyway....... I think.


PHXFLYR

 

[Wiskey Driver]

You are crazy. Southwest is fine. They will always be fine. There is no way they will ever loose money, and they are hiring like crazy! Best place in the world to work!!!

[Fade to 5 years ago and replace the word "Southwest" in the above sentence with AA, DAL, USAIR, UAL, etc....]

Slow your role there son, I never said they weren't!!!! Now take a deep breath and go back and re-read what I typed. I think you we see the word IFin there...

WD.

 

[Cactus73]

Cactus 73;


Do you know when then next ATSB loan payment is due and how much?
Also what is the balance remaining and the interest rate? Thnx..

PHXFLYR

Current cash on hand = $419.1 million
Unrestricted cash = $305.7 million

$41.3 million is in an escrow account to cover unsecured notes due September 1, 2005.

ATSB Loan =

Loan amount = $380 million

Ten payments of $42.9 milion due on March 31 and September 30 ending September 30, 2008.

Total cost of loan = $429 million at close to a 11.4% rate.
U.S. treasury given significant stock options. Many conditions placed on AWA business plan and labor relations that can't be quantified in a dollar amount.


18 Airbus aircraft on order were purchased instead of leased due to low interest rates and high current market lease rates.

Source: AWA annual report and recent SEC filings.

Just a note: Our lose for the year equaled our ATSB debt payments. Without this debt we would probably have lost a little or broke even.

 

[skykid]

Well, what I was trying to say in a nice way was here you are working for an airline that has benefited from Ch11, could very well be there again, but in the meatime you are going to lecture others. Good luck to you.

 

[Resume Writer]

Considering that AWA has $275 million in cash, I would say that is a FAR cry better than what we had on-hand after 9/11. I think the figure was $30 million in cash and burning through $1 million per day.

At this point, I would say that AWA is a relatively safe bet. Of course, the airline industry is a "blowing in the wind" kind of industry; anything can happen.

Kathy

 

[Cactus73]

Well, what I was trying to say in a nice way was here you are working for an airline that has benefited from Ch11, could very well be there again, but in the meatime you are going to lecture others. Good luck to you.

Sorry you feel I was lecturing you. I was just poining out what our CEO and I feel are some of the things going on in the industry.

Did AWA benefit from Chapter 11? I don't know. Yes it gave me a job and kept others employed but because of it we have such a high debt load and are in a very questionable financial postion right now. It may have just delayed the inevitable.

I'll take the gesture of "good luck" without the sarcasm you implied and wish you the same. Mine is not sarcasm though. I mean it. I want this industry to turn around so we all have long term careers. Pilots are great at fighting themselves while the whole ship is sinking as one.

 

[xanderman]

Southwest is fine. They will always be fine. There is no way they will ever loose money...

Uh Oh! I'd be real careful saying that about any airline!! How long have you been in this business?

 

[FDJ2]

Just a note: Our lose for the year equaled our ATSB debt payments. Without this debt we would probably have lost a little or broke even.

What would your cash position be without that ATSB loan?

 

[Cactus73]

What would your cash position be without that ATSB loan?

minus a lot

There would be no AWA without the ATSB loan.

 

[furloughfodder]

Uh Oh! I'd be real careful saying that about any airline!! How long have you been in this business?

Exactly my point.


[/SARCASM]

 

[reepicheep]

"Everyone in this room will be a captain within 6 years"

"You will never have a bad day at this company"

"This airline has the strongest balance sheet in the industry"

"Within 2 years we will carry more passengers than any other airline"

told to USAir newhire class circa 1987

 

[acbarney]

"Everyone in this room will be a captain within 6 years"

"You will never have a bad day at this company"

"This airline has the strongest balance sheet in the industry"

"Within 2 years we will carry more passengers than any other airline"

told to USAir newhire class circa 1987"

And again in 1999 except it was captain in 2 years.

 

[414Flyer]

600,000 million? Thats 600 billion isnt it?

 

[CMonBoard]

How many privately owned companies are there that provide services to your publicly held company? Do those companies provide those services at a competitive rate or a usurious rate?

The reason I ask is that earnings at an airline are somewhat nebulous because money can be shifted from one entity to another to inflict a loss on one and profits to the other private company. Meanwhile, the private companies can pay out huge bonuses from those profits to anyone it chooses and doesn't have to disclose that to the SEC. Imagine that poor executive that is taking a massive paycut or no salary (making a sacrifice) while receiving a payout from one of her other companies.

I'm not conspiracy theorist, but this is common corporate tax planning. that is easy to implement.

 

[reepicheep]

"Everyone in this room will be a captain within 6 years"

"You will never have a bad day at this company"

"This airline has the strongest balance sheet in the industry"

"Within 2 years we will carry more passengers than any other airline"

told to USAir newhire class circa 1987"

And again in 1999 except it was captain in 2 years.

Except in 1999 if you would have asked around we all would have told you it was b.s.