Is BK in the near future for American Airlines?

[NoOtPilot]

In the past week, American Airlines Group Inc. AAL stated that Hurricane Florence is likely to hurt its third-quarter revenues and pre-tax income by approximately $55 million and $50 million, respectively. This apart, high fuel costs are anticipated to weigh on its third-quarter earnings. Following the update, shares of this airline behemoth tumbled to a 52-week low of $33.55 on Oct 9.

$32.16 on Oct 10.

How low the stock price will have to go, before they consider BK again?

[Robsquatch]

You right. It could be really really bad over there. Don’t flow. Stay at eagle for the stability

[ardvark]

Short answer yes. Depends on dougy's mood during contract talks with apa. Half union groups still not merged yet.

[Beagleboy]

The stock price wont be the catalyst that leads to any Chapter 11 filing, it would be a debt/liquidity equation. Right now, AA isn't likely to suffer quarterly losses unless a geopolitical, national, industry or AA specific crisis occurs. Then all bets are off and that risk is indeed there as clearly AA is far more vulnerable then virtually ANY other airline. IMO, they've boxed themselves into a corner as they have too much debt to make any further investment capital likely without serious risk for a new fleet type purchase (mainline or regional) or other investments. Right now, they are putting their profits back into the stock which isn't yielding results and building their expensive new offices, but shareholders aren't getting any return with the share price or significant dividends.

But, that being said, AA isn't likely to find itself in say a TWA situation where they are broke and running out of operating cash. The more likely scenario would be another "strategic" bankruptcy, especially if the share price is rock bottom and shareholders are already getting bupkis. Dumping debt and obtaining new flexibility would be the point. The AA pilots A-fund is front and center of their risk. But, strategic C11's aren't free and such a move would have the unenviable byproduct of trashing confidence in present management who would likely move on with their $$$ leaving the employees holding the bag again and a product that would surely fall down a rabbit hole of being serviced by the most alienated labor force since the gutting and demise of EAL. But, one potential partial solution for that is outsourcing more flying away from AA toward a new product as a result of Scope changes which would likely result (by force if necessary) leaving junior AA pilots especially holding a large pile of odoriferous excrement as AA contracts from retirement attrition (meaning no flow). Larger and very shiny small jets like the Embraer E2's or A220's would blow the market open with Eagle and send shock waves across the bows of Delta and United, especially with its crap pay and working conditions. The only way Scope will be relaxed or even broken at AA is by force or a "lesser of two evils" approach by management.

Actually for AAG, the next strategic BK might just be something rationalized as necessary for a healthier future despite short-term pain if it whacks HUGE labor debt and opens scope. It might be the only option absent successful strong-arming of all mainline AA labor groups each having scope protections. Envoy pilots know all too well the experience and results of negotiating with a sword over your head choosing the lesser of two evils. Again, the fantasy flow to AA is ripe in so many ways to turn into a ticket to frustrated stagnation and the associated guilt of wasting many years all for a fantasy over-valued and over-sold for the benefit of others. Sometimes Mongo really is only pawn in game of life and Mongo never sees it coming either.

Caveat Emptor.

[Beagleboy]

You right. It could be really really bad over there. Don’t flow. Stay at eagle for the stability

Not that far off under the right scenario. Considering the labor costs across the board in the Eagle system and the thought of what profits could be realized with the right aircraft that currently is out of reach. Even as a stepping stone to elsewhere (except the withering AA), if the jet is shiny enough more potential pilots will rationalize Eagle. With current scope and the present hamstring situation though, the situation is ultimately bleak considering the rapidly increasing shortage of pilots.

[RobertRoss]

You right. It could be really really bad over there. Don’t flow. Stay at eagle for the stability

Forget that. Don’t flow and come to SWA. Get this schedule, make more money, enjoy life.

32BB28F6-5D51-4AA3-9023-E24D7ED3DEDD.jpg

Our premium rules apply when we get rerouted. This week, I got rerouted to sign in 5 minutes later and finish at the same time. Because I had to fly later on day 1 (I got premium for a LAX to MSY leg) and I have to fly later day 2 (I get premium for a HOU to PHX leg), and I have to fly earlier on day 3 (I get premium all day).

It sucks that I went from having a (4-4-2) trip to a (3-5-3 w/ 3 deadheads) trip, but I also went from a trip worth 19.5 TFP (16.8 hours) to a trip worth 33.22 TFP (28.6 hours). Translation, $1600 additional.

[Beagleboy]

Forget that. Don’t flow and come to SWA. Get this schedule, make more money, enjoy life.

32BB28F6-5D51-4AA3-9023-E24D7ED3DEDD.jpg

Our premium rules apply when we get rerouted. This week, I got rerouted to sign in 5 minutes later and finish at the same time. Because I had to fly later on day 1 (I got premium for a LAX to MSY leg) and I have to fly later day 2 (I get premium for a HOU to PHX leg), and I have to fly earlier on day 3 (I get premium all day).

It sucks that I went from having a (4-4-2) trip to a (3-5-3 w/ 3 deadheads) trip, but I also went from a trip worth 19.5 TFP (16.8 hours) to a trip worth 33.22 TFP (28.6 hours). Translation, $1600 additional.

Yes, I talked with a SWA check Airman a few weeks ago and he was describing your scheduling/pay system. Seemed kind of complicated, but sure paid one hell of a lot better. I recall him saying more junior pilots got 15-day monthly schedules (flying) and those senior 12-day scheds. I looked at his trips and some were quite busy, but efficient either in the airplane making $$$ or home. No way AA could do that as they aren't very efficient in the scheduling dept. Their PBS system is about covering the schedule with the fewest pilots while concurrently paying the least. It used to be AA pilots worked far less then SWA pilots, but also got paid less (Group II), now it's just paid less and away from home more with many 24-30 hour layovers sitting around and now 5-day trips with trailing red-eye's.

Congrats on your excellent work environment and proper compensation while away from home.

[RobertRoss]

Yes, I talked with a SWA check Airman a few weeks ago and he was describing your scheduling/pay system. Seemed kind of complicated, but sure paid one hell of a lot better. I recall him saying more junior pilots got 15-day monthly schedules (flying) and those senior 12-day scheds. I looked at his trips and some were quite busy, but efficient either in the airplane making $$$ or home. No way AA could do that as they aren't very efficient in the scheduling dept. Their PBS system is about covering the schedule with the fewest pilots while concurrently paying the least. It used to be AA pilots worked far less then SWA pilots, but also got paid less (Group II), now it's just paid less and away from home more with many 24-30 hour layovers sitting around and now 5-day trips with trailing red-eye's.

Congrats on your excellent work environment and proper compensation while away from home.

Thanks.

That was an 18 day off line. After swapping a 4day for a 3day and the 2 days of carryover, I end up at 17 days off. Minimum days off in the line construction (including RSV lines) is 15.

I look to fly certain days not total pay or total days off, so (as a jr pilot) I end up with the less desirable trips in order to get a Mo-We schedule.

[NoOtPilot]

The stock price wont be the catalyst that leads to any Chapter 11 filing, it would be a debt/liquidity equation. Right now, AA isn't likely to suffer quarterly losses unless a geopolitical, national, industry or AA specific crisis occurs. Then all bets are off and that risk is indeed there as clearly AA is far more vulnerable then virtually ANY other airline. IMO, they've boxed themselves into a corner as they have too much debt to make any further investment capital likely without serious risk for a new fleet type purchase (mainline or regional) or other investments. Right now, they are putting their profits back into the stock which isn't yielding results and building their expensive new offices, but shareholders aren't getting any return with the share price or significant dividends.

But, that being said, AA isn't likely to find itself in say a TWA situation where they are broke and running out of operating cash. The more likely scenario would be another "strategic" bankruptcy, especially if the share price is rock bottom and shareholders are already getting bupkis. Dumping debt and obtaining new flexibility would be the point. The AA pilots A-fund is front and center of their risk. But, strategic C11's aren't free and such a move would have the unenviable byproduct of trashing confidence in present management who would likely move on with their $$$ leaving the employees holding the bag again and a product that would surely fall down a rabbit hole of being serviced by the most alienated labor force since the gutting and demise of EAL. But, one potential partial solution for that is outsourcing more flying away from AA toward a new product as a result of Scope changes which would likely result (by force if necessary) leaving junior AA pilots especially holding a large pile of odoriferous excrement as AA contracts from retirement attrition (meaning no flow). Larger and very shiny small jets like the Embraer E2's or A220's would blow the market open with Eagle and send shock waves across the bows of Delta and United, especially with its crap pay and working conditions. The only way Scope will be relaxed or even broken at AA is by force or a "lesser of two evils" approach by management.

Actually for AAG, the next strategic BK might just be something rationalized as necessary for a healthier future despite short-term pain if it whacks HUGE labor debt and opens scope. It might be the only option absent successful strong-arming of all mainline AA labor groups each having scope protections. Envoy pilots know all too well the experience and results of negotiating with a sword over your head choosing the lesser of two evils. Again, the fantasy flow to AA is ripe in so many ways to turn into a ticket to frustrated stagnation and the associated guilt of wasting many years all for a fantasy over-valued and over-sold for the benefit of others. Sometimes Mongo really is only pawn in game of life and Mongo never sees it coming either.

Caveat Emptor.

Strategic BK keeps getting closer, one step at a time.