fam62c and ACL65, I suggest you take a look at the composition of the creditors' committee. Fragmentation? You're smoking crack.
I clearly remember guys like the two of you licking their chops over various UAL fragmentation scenarios when we went through BK. AMR's BK is very different than previous airline BKs because they are self-funding their DIP financing, giving AMR much more control over the process. And 1/3 of the seats on the creditors committee are representatives of AMR's unions. Not to mention that PBGC has a seat on the committee. Fragmentation? Not likely.
AMR will shed nonproductive and marginally productive assets. They may sell off Eagle and dump all of their mad dogs but I doubt that you'll see any routes or newer aircraft being sold off. This is not a distress BK where crown jewels will be sold off; this is one where they need to shed nonproductive assets.
For what it's worth, I have no idea which AMR assets fall in the nonproductive/marginally productive category; I'm merely taking a stab in the dark with respect to Eagle and the mad dogs.
Perhaps the two of you will get the joy of experiencing a BK at your respective airlines and can report first hand which assets you expect to be sold off.
To all at AMR, best of luck to you. Hopefully this won't be much more painful than passing a gallstone. Painful yes, but not amputation as is being suggested by others.
Andy;
In response to your first statement about the creditors committees:
Those labor groups are on the Unsecured Creditors Committee, and not the one that gets first crack, the Secured Creditors Committee.
It was the same at UAL and at DAL when they went though. Labor does not hold assets, and therefore in a CH11 filing goes second. The same holds true for those labor groups at AMR. They may get some money for their pensions, but the creditors with assets that they can remove are the ones that first crack at AMR and their money.
These secured creditors have assets that they can pull if they choose to. AMR is sitting on a pile of cash and that cash is going to make AMR negotiating anything less than 70 cents on the dollar very hard. Yes, they opted not to file for DIP, and that does give them some control, but until they cancel off of the stock, the stakeholders that own that stock, and the secured creditors that hold the assets can take this thing sideways, no matter what Labor or AMR have to say. They are still a publicly traded company that can have their board replaced in a hostile takeover of their common and preferred stock.
If you do not think that if the creditors will not attempt that if they feel AMR does not have a sustainable plan going forward you are fooled.
You used AMR and DAL's CH11 filings as a template and that is a mistake. Even when these two airlines filed they did not have a revenue problem. Yes, AMR looked like these two airlines did back then, but the airline world has changed to one with JV's and code shares along with domestic RJ lift. AMR has not morphed. That would be great to go back to, but that will never happen. Their inaction has left them with five hubs that are in good geographical locations but lack the revenue lift and connecting traffic revenue to give them a revenue plan that many creditors will sign on to. Yes, that can change, but given what Horton has stated, they want to shrink and keep the same plan. The pilots are balking at a B6 code share, and with good reason, and they are in the infancy of JV's among their OneWorld partners.
If you watch their feet, they want to dump old lift, and kill Eagle. That sounds all well and good from a pilot perspective, but from a revenue standpoint that the creditors are singularly worried about, they see a lot of jets that will get parked, and no lift that can replace it within two to three years. That leads to a PanAm sort of network, and as we know that will not sustain itself. A merger is needed at a min.
Parker will want to control that, and he learned from DAL that he cannot wait until the creditors sign off on the company's plan. He will strike earlier, and it is very plausible that UAL and DAL along with LUV will be vying for assets. Heck, LUV would probably be more than happy to take their place within Oneworld.
Horton knows this, Dave Bates knows this and last week they addressed this. If you watch the Bloomberg interview with their head attorney, he knows it to. They are expecting a buyout, hostile takeover, or offer of assets. The creditors ears are open, and given AMR's revenue plan, it is quite possible that these players will be successful.
That said, I agree, this sucks for the employees, because, as always, they will take it in the shorts to keep their paychecks coming.
