Over the past several days, we have seen quite a ride for American Airlines’ share price.  There has been rampant speculation that the decline in share prices were due to the higher than average number of retirements at the end of September.   Some think the pilots “know something” and are sure there is going to be a bankruptcy.

I am by no means high on American Airlines.  To the contrary, I think they continue to act as if their problems are being fixed or are not that severe and I think the executive leadership is approaching irresponsible in certain areas. 

That said, we’re also talking about a company that has enough unrestricted cash to live unconstrained for another 4 years.  That doesn’t spell bankruptcy.  The pilots don’t know anything special and, frankly, they probably know less than many. 

But I do think this reflects the frustration and negative emotion that many feel about this company.  I think there is a sense that there are growing missed opportunities to come out alive and healthy.  I think many people have looked for a reason to dump their shareholdings and they finally found one that works for them. 

But I also think that I’m tempted to buy up AA stock right now because not only do I think they survive in the near term and not only do I think they won’t enter into bankruptcy, I think their share price will climb considerably over the next year from where it is today.   Because everyone likes a deal and right now AA stock is a pretty good deal.

Filed under: Airline News by ajax
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