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Major Changes Planned For AMR's Fleet

Soumis
 
AMR Corp.’s fleet is due for a substantial overhaul now that the company’s American Airlines and American Eagle Airlines divisions are under Chapter 11 bankruptcy protection. Fleet plans had already been initiated by AMR, with a major narrowbody upgrade program using both Airbus and Boeing aircraft announced in July and a suspended divestiture of Eagle reducing that airline’s regional jet operations over the next decade. But with yesterday’s filing in the U.S. Bankruptcy Court for the Southern… (www.aviationweek.com) Plus d'info...

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canuck44
canuck44 0
As expected AMR announced sale and lease back of 15-737-NG aircraft that have been or about to be delivered. This takes them off the books if approved by the judge. This is necessary as AMR will not be able to raise money in the bond market as they plan to selectively stiff those that have MD80 and 757 series as security. They have 24 MDs in the desert. If they lose their 757s they will have service gaps as they are needed for longer range service to South America so expect them to be paid as long as possible.

http://finance.yahoo.com/news/ILFC-Secures-SaleLeaseback-bw-46191877.html?x=0&.v=1
preacher1
preacher1 0
Well, as somebody already talked about it last week when this was first announced, this is just the very first round of gas right now. Very minor but laying the groundwork for other things to come. One thing I noticed in the article. They mentione Eagle and getting rid of a lot of those planes, but unless I missed it, I didn't see anything about replacing them. Makes me wonder about your comment about Mesa the other day. One thing about it, I think my flying days are through down there for awhile until all this sorts out. Ireally think Tulsa is on the block if the right buyer can be found. Some big mod outfit with deep pockets and a long term pay as you go contract from AA; Somebody will buy it.
canuck44
canuck44 0
The judge is going to look very hard at the new deal and how the financing is structured because it certainly was planned in conjunction with the Ch 11 filing. This is the first indicator for you know this was already inked as the bankruptcy was planned. They need the $4 Billion on hand for operations, mortgages and leases.

Eagle needs to be recapitalized. AMR is not going to have new capital to do it so better to make a deal at least for the high traffic routes they need to feed them. As government subsidies dry up, the need for these services will contract. Don't be surprised to see them keep the ATR and CRJ routes and dump the ERJs.

Tulsa will be lucky to keep busy given the international competition for this work, particularly D check work. Maybe they need to find the buyer you suggested with enough foresight to find a niche market.

I'll bet you don't wind down on the MD80s for another few years...it takes time to get new A/C and crew conversion. AA leases 176 of their 600+ A/C...much of it will depend on which ones are on lease and the negotiations permitted in the 60 days after filing. They will do sale and lease back on anything useful they own of value but not nailed down.
preacher1
preacher1 0
Well, if they hang on to the MD's that may save Tulsa, at least for awhile. They have a reman program going up there that is saving AA about $250grand per bird over the open market. It will all be interesting but you are right on one thing, stemming all the way back to the new AC orders, SOMEBODY knows exactly what is going to happen cause this was all well planned out from a while back.
canuck44
canuck44 0
It will be interesting when we see the source financing for the Airbus component. When you have no access to the bond market having just stiffed the bond holders, straw purchasers with "lease" agreements are the only instrument left. They are likely to be pricey when they have you over a barrel.
preacher1
preacher1 0
Been there and done that with some truck line customers. Haven't had many but when you get burned or see them burn somebody, you don't do favors. Kinda like that check last weekend. I got it and into the bank. Any more calls will be pricey and a wire in advance.LOL
canuck44
canuck44 0
Read my frivolous squawk...maybe they will throw in a teenage flight attendant to hug, but then they would probably have to borrow one from Southwest. LOL
preacher1
preacher1 0
I dunno, the BA bunch seems to be doing good all by themselves.LOL
onceastudentpilot
tim mitchell 0
I wonder if you start an airline with a few c-130's....i kid i kid....although you could get quit a few seats in there.
Pileits
Pileits 0
AMR studied the United and USAir bankruptcies for YEARS before filing their own. You can bet they play or milk the system beyond belief!
indy2001
indy2001 0
To add to the title, AA just sent out e-mails to customers about the 777-300ER's that will be joining the fleet in the next few months. (I hadn't realized that no other US airline flies the -300, only -200s.) Initially intended for the heavy LHR traffic, they are outfitted with true lay-flat seats in first and business classes, as well as a self-service bar. They are adding Premium Economy seats, and there will be WiFi throughout the aircraft throughout the trans-oceanic flight. More details at http://www.airlinesanddestinations.com/airlines/premium-economy-seats-and-international-wi-fi-to-feature-in-americans-777-300ers/.
canuck44
canuck44 0
Unfortunately most of the US airlines either bought their 777s before 2006 or saw a need for the 200LR for specific routes beyond the range of the 300ER....as in ATL-JNB. American tends to let BA do their ultra-long haul with their longest route probably ORD-PEK.
genethemarine
Gene spanos 0
Word is that AA maybe pull out of the O'Hare Hub - market ?
preacher1
preacher1 0
Well, in their filing, they said that was one they would be concentrating on, so who knows?
canuck44
canuck44 0
No chance...profitable international service from there and modern AmEagle fleet. Five points on the domestic to international pentagon are JFK, DFW, LAX, ORD, MIA plus San Juan, I suspect will likely be safe. San Jose has already cranked down. Possible Gate sale at LGA or complete turn over of the LGA regional operation to a new owner in exchange for cash and a transfer agreement seems more likely and prevents the need for recapitalizing the AE operation.
skyfly12
shawn white 0
I bet some Chinese or Indian Billionaire will buy AA to impress his friends. They do things like that a lot these days.
bajajoes
Baja Joes 0
So, who will AA merge with? LAS is taking bets.
preacher1
preacher1 0
I may be wrong, and I am sure there will be rumors, but I don't think there will be any serious overtures until after the bankruptcy is a done deal and that is apt to be a year and a half at best. Everybody else out there, as far as domestic carriers, is about in the same shape. I really can't understand the logic behind the DAL-NWA merger yet and from what I am hearing, some are regretting it.
devsfan
ken young 0
AA will be a standalone carrier.
Hopefully, AMR will find a way to dump their union contracts so that the company can slash labor costs. AA is suffering from legacy carrier pension and benefit packages that are unsustainable.
bajajoes
Baja Joes 0
Ken, I sincerely hope you are correct and AA stays away from other Majors.
If Ch 11 is a success there should be no need for outsiders.

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