AeroAg2003 said:
Mtn_Guide said:
Don't airport hubs effectively provide AA a moat?
Hubs and strategic moats don't matter if there is no demand. Hubs are only protection when you can charge a premium vs alternative products.
AA has the highest leverage of the big 3 and the least amount of dry powder (unencumbered assets) left if they need more cash. The unsecured bond market isn't really functioning right now, not to mention I'm not sure who would lend AA month without a security. Their fate will likely pivot on whether the government keeps providing loans to keep them afloat.
UA probably isn't far behind. DL has the strongest balance sheet of the big 3. However, their latest 8K said they were burning $60M in cash a day. That's a lot of cash burn to cover.
Unless the lock down ends very soon, I think at least one of the big three files in 4Q or early 2021.
I thought AA was declining before US Air bought them. The US Air management has made flying miserable, even for people that mostly sit in first class. I've been concierge key for 5 years, and I had an opportunity to meet Doug Parker. He asked me for feedback. I told him I was frustrated that AA had devalued the points so significantly, made redemptions less appetizing, and had made accrual of points significantly harder. I also shared that the seat space situation was becoming untenable, even in first class, and asked him if their goal was to find the minimum tolerable comfort point that people would pay for. He basically confirmed that.
I've started to take the Pepsi challenge and fly other airlines, normally buying first fare. You know what? The worst flight on any of the competitors is better than the best flight on AA. It's occasionally inconvenient to fly other airlines living in Dallas, but the experience is better.
They deserve to go bankrupt for lots of reasons, #1 is the worst service and worst experience for their customers