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American Morning
Minding Your Business: Chapter 11 on Horizon for American Airlines?
Aired March 11, 2003 - 07:46 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Our guest again today, more economic news of the negative type. American Airlines, are they on the verge right now of bankruptcy?
Let's check in on a market preview now. Andy Serwer is minding our business.
Before we talk about American, let's talk about the markets of yesterday.
ANDY SERWER, "FORTUNE" MAGAZINE: A devastating day yesterday on Wall Street, Bill. Stocks plunged -- that's the only way to put it. The Dow was down 171 points, the Nasdaq 26, S&P 21. Where do you begin with this day?
No single trigger event, just a tremendous amount of fear out there. All 30 Dow stocks down yesterday...
HEMMER: Wow!
SERWER: ... 0 for 30.
HEMMER: How often does that happen?
SERWER: This is the third time this year, Bill, matching last year's total already. So you can just see, people said we weren't going to be down four years in a row. Indexes down about 9 or 8 percent. Mutual funds down over the past 52 weeks 20 to 25 percent.
Just a tremendous amount of selling by people, and theyre putting money in bonds. Bond yields have been pushed down now to 45- year lows on the 10-year bond. People taking money out of stocks and putting them into bonds. All kinds of stuff, as I indicated -- Fannie Mae, GE, McDonald's at a 10-year low.
And one stock that really plunged yesterday, you mentioned at the open, American Airlines. The news there is the company is exploring going into bankruptcy, looking for bankruptcy financing. On Wall Street yesterday, the stock was down 14 percent, down 40 cents.
Look at this story, you know, from 28 to 2. Is it possible American Airlines goes into bankruptcy? You asked that question. Yes, it is possible. It's very possible.
HEMMER: So that puts them on the long list, right?
(CROSSTALK)
SERWER: Yes, well, that puts them on -- well, United is in bankruptcy, US Air is in bankruptcy. Really a perfect storm right now for the airline industry. It's the only way to put it. You had 9/11, terrorism, war, soaring fuel costs, soaring security costs. And if this war with Iraq happens, that would just be another crippling blow for the business. Going back to '91, you had Eastern, Pan Am and Midway going bankrupt. We could see the same thing here.
HEMMER: Wow!
SERWER: Delta is the last of the big three that appears to be at least in reasonable shape.
HEMMER: Thank you, Andy. You wonder if that bailout back after 9/11 was a waste of money, or if it's helped (UNINTELLIGIBLE) to this point.
SERWER: Yes, right. The only good news is futures are up this morning.
HEMMER: We'll find the silver lining eventually.
SERWER: Yes.
HEMMER: Let them talk.
SERWER: Yes.
HEMMER: Thank you, Andy.
SERWER: OK.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
Airlines?>
Aired March 11, 2003 - 07:46 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Our guest again today, more economic news of the negative type. American Airlines, are they on the verge right now of bankruptcy?
Let's check in on a market preview now. Andy Serwer is minding our business.
Before we talk about American, let's talk about the markets of yesterday.
ANDY SERWER, "FORTUNE" MAGAZINE: A devastating day yesterday on Wall Street, Bill. Stocks plunged -- that's the only way to put it. The Dow was down 171 points, the Nasdaq 26, S&P 21. Where do you begin with this day?
No single trigger event, just a tremendous amount of fear out there. All 30 Dow stocks down yesterday...
HEMMER: Wow!
SERWER: ... 0 for 30.
HEMMER: How often does that happen?
SERWER: This is the third time this year, Bill, matching last year's total already. So you can just see, people said we weren't going to be down four years in a row. Indexes down about 9 or 8 percent. Mutual funds down over the past 52 weeks 20 to 25 percent.
Just a tremendous amount of selling by people, and theyre putting money in bonds. Bond yields have been pushed down now to 45- year lows on the 10-year bond. People taking money out of stocks and putting them into bonds. All kinds of stuff, as I indicated -- Fannie Mae, GE, McDonald's at a 10-year low.
And one stock that really plunged yesterday, you mentioned at the open, American Airlines. The news there is the company is exploring going into bankruptcy, looking for bankruptcy financing. On Wall Street yesterday, the stock was down 14 percent, down 40 cents.
Look at this story, you know, from 28 to 2. Is it possible American Airlines goes into bankruptcy? You asked that question. Yes, it is possible. It's very possible.
HEMMER: So that puts them on the long list, right?
(CROSSTALK)
SERWER: Yes, well, that puts them on -- well, United is in bankruptcy, US Air is in bankruptcy. Really a perfect storm right now for the airline industry. It's the only way to put it. You had 9/11, terrorism, war, soaring fuel costs, soaring security costs. And if this war with Iraq happens, that would just be another crippling blow for the business. Going back to '91, you had Eastern, Pan Am and Midway going bankrupt. We could see the same thing here.
HEMMER: Wow!
SERWER: Delta is the last of the big three that appears to be at least in reasonable shape.
HEMMER: Thank you, Andy. You wonder if that bailout back after 9/11 was a waste of money, or if it's helped (UNINTELLIGIBLE) to this point.
SERWER: Yes, right. The only good news is futures are up this morning.
HEMMER: We'll find the silver lining eventually.
SERWER: Yes.
HEMMER: Let them talk.
SERWER: Yes.
HEMMER: Thank you, Andy.
SERWER: OK.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
Airlines?>
