AMR Corporation - 7.875% Public Income Notes (PINES) (AAR)

[mrholty]

Going into BK - the company was offering the pilots 3 and the pilots were countering 7%. Wages were already competitive with DL, and United/Continental for the most part.

I've not seen the unfunded liabilities as that high as their pilots have an A/B scale since the early 90s IIRC.

The other groups; mechanics, FA, gate agents, ramp rats don't really matter as they will take what they get for the most part. They will make some noise but my guess is that their salary isn't going to change much but there will be major work concessions that the average Joe Fueler won't see or understand.

Fleet decisions were already made this summer with the announcement of Airbus and Boeing order and we know what they are going to dump. Going from a 100% boeing shop proably cost them 10% from Boeing so you know they got a good deal from Airbus. A major sticking point with the APA (not ALPA) which will throw an interesting dynamic into this BK is who fly's the 70 and 90 seaters to replace the MadDogs and the 145s.

I need to find a list of who owns what planes as my gut tells me that they should almost own all of their old airframes but I've seen reports that they have leases on some of the MD80s out until 2024 which seems insane.

I agree that right now its early as I don't have a position but Delta and NW's bankruptcies are probably a good proxy. I don't think they will kill all their unsecured creditors as the airlines business is incestous.