Turns Out Bankrupt American Airlines Owns A $30 Million London Townhouse

When a company files for bankruptcy, some interesting things can come up in the listing of assets. Like say, a London townhouse that could be worth up to $30 million — which was listed in American Airlines’ recent Chapter 11 bankruptcy filing.

So what would an airline company even need with such an extravagance? As a travel home for senior executives, of course, reports Reuters, as well as for “corporate functions from time to time.” The five-bedroom house is in one of London’s poshest neighborhoods, Kensington, just a few blocks from where Princess Diana lived.

The home was bought in the early 1990s and is listed as “London Residence LON6526,” and is one of eight properties American Airlines’ parent company AMR lists in the filing. While $30 million might not be much compared to the $30 billion or so in liabilities the company is buried under, perhaps curtailing such expenditures in the first place would’ve been a good thing to do.

At a time when others are worried about keeping less costly homes over their heads, the existence of the house is causing a bit of an uproar.

“In the current economic downturn, many Americans have lost their houses. In this bankruptcy, AMR’s executives should lose their house,” said James C. Little, president of the 200,000-member Transport Workers Union of America, which is on the airline’s creditors’ committee.

“However, the typical pattern for this company is workers keep it afloat through concessions, bring in outside work and boost productivity while managers pocket hundreds of millions in bonuses and live posh lifestyles. This would have been Marie Antoinette’s favorite airline.”

The $30 million price tag is a high estimate, but even if were to go for half of that on today’s market, it’s still too many millions for a company that’s flailing around in bankruptcy.

American Airlines’ $30 mln London town house [Reuters]

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  1. [redacted] says:

    “the typical pattern for this company is workers keep it afloat through concessions, bring in outside work and boost productivity while managers pocket hundreds of millions in bonuses and live posh lifestyles.”

    This quote pretty much sums up how most major companies seem to act these days. Bonuses for execs and CEOs rise or stay consistent while layoffs are abound and workers are asked to do twice the work for the same or reduced pay.

    • vastrightwing says:

      Now we know where the $25/bag fees went.

    • trellis23 says:

      And yet, somehow, those in power have convinced the masses that it’s those working in the unions (those making concessions) that are the people causing these huge economic woes.

    • Slader says:

      Well, if you as an employee do not like your pay then either get a degree and start your climb up the managerial ladder or quit and start your own airline or other business.
      As for the managerial and CEO pay; as long as people are willing to pay their prices to fly in their airplanes, the can do whatever they want to with their money and distribute it as they desire.
      Again, if the employees do not like it, they can quit and start their own airline or other business.

      • DFManno says:

        The 1% speaks.

        • Slader says:

          ROFLMAO… Buddy, I am about the farthest thing from the !% (unless you are talking the lower 1% of working people) whom you will meet.
          The difference is, I am not a Socialist or a Communist, I am a Realist.

          • kujospam says:

            No, you are delusional. I own stock and I would be most of the stockholders would love the exes to get paid less. Most CEO’s do crap besides being a normal manager. Normal manager work should not get paid millions of dollars. Most CEO’s take ZERO risk and responsibility. I believe in capitalism, we don’t have capitalism, we have corporatism. Please get your head out of your ass. If a CEO does something such as help put money to invest in a new product that creates millions for the company, or helps save the company from bankruptcy from a former Clueless CEO, then sure deserves to be paid comparably to his PERFORMANCE. But the FACTS remain, that MOST CEOs are just high level managers that get paid millions to do work that some other person could do for under 1 million and be just as good.

          • DFManno says:

            Then you’re either a propagandist for or a dupe of the 1%.

      • [redacted] says:

        It’s funny you assume that people who don’t like their pay are without degrees. Also, your response that those who aren’t happy with whats going on should just “quit and start their own airline or other business” is just a blind statement. Do you know what goes into starting a business? Lots and lots of money, time, etc… Acting like everyone that is unhappy with how things are done can just drop what their doing and take that kind of risk is just stupid. I know I couldn’t with my family depending heavily on me to bring home money consistently. A friend of mine started a small computer repair shop (which I invested in with him) and he didn’t take a paycheck for a year.

        This isn’t about socialism or communism (which has absolutely nothing to do with this article but is used to strike fear in people just like during the Red Scare and how the term socialism is used today). It’s about (as kujospam put it) corporatism.

  2. MeowMaximus says:

    Let them eat cake – airline cake!

  3. Hi_Hello says:

    how much did that pay for the house in 1990?

    5 bedroom, 30mil, for 30 mil, it better be able to covert rain water into oil.

  4. BrightShopperGettingBrighter says:

    Scrooge McDuck? Is that you? I didn’t know you were in the airline industry.

  5. Excuse My Ambition Deficit Disorder says:

    I agree with what Mr. Little says to an extent, but I bet Mr. Little has some financial skeletons in his closet that he doesn’t want exposed. According to the TWU website, that lists his background; looks like he has been out of touch for some time with those American’s that lost their homes. Nice try to get the sympathy of us Americans though.

  6. Fumanchu says:

    There is more to this story, I know it.

    Something along the line of either of these two:

    1. this lets the airline skirt some UK landing tax or something law because the owner is technically a resident of the UK.

    2. This house is used as a place to butter up politicons or something.

    • Rachacha says:

      Probably both. WHile a $30 million home is a lot, one also has to look at the advantages that it may offer…tax breaks, “free housing” for executives on extended business trips (rather than staying at a hotel) and a location to host networking events between politicians and company executives. Sure the house may be worth $30 million today (who knows what teh cost was 20 years ago) which works out to $1.5M every year for 20 years, it may have been a good investment, or at least a break even investment.

      • consumeristjohnny says:

        You can’t entertain in a smaller less expensive home when your company is asking a court to wipe away a portion of your debt? Sorry,. I aint buying it. If a person files for BK protection, they do not have the option to keep their second home. It is an asset that gets sold. If the SCOTUS insists that corporations are people, then they must be treated the same. They are filing for what amounts to a chapter 13 BK. I suggest all executives must be forced to live within a budget for 3-5 years. Any extra assets or income must be used to pay back any contracts or debts that were lowered in the bankruptcy. If AMR can not live within that budget a forced liquidation will happen. The owners of other airlines can buy their assets to pay back creditors.

  7. lettucefactory says:

    While I agree with the general point that James C. Little is making….Marie Antoinette’s favorite airline? Really? I think the deed speaks for itself without that little twist of bad hyperbole.

    • Round-Eye §ñ‰∫∫„ÅØ„Ç≥„É≥„Çπ„Éû„É™„ÉÉ„Çπ„Éà„ÅåÂ•Ω„Åç„Åß„Åô„ÄÇ says:

      Besides, Marie Antoinette wasn’t nearly the baddie history has made her out to be. She wasn’t super great and definitely enjoyed luxuries, but she’s been relatively maligned in the intervening centuries. That hyperbole is eyeroll-inducing, and rather factually inaccurate.

  8. Dave B. says:

    Come on now, you don’t want coporate big wigs to have to stay in a sleazy 5 star hotel do you?

  9. RogerX says:

    “…while managers pocket hundreds of millions in bonuses”

    …but conveniently you forgot the part where unskilled laborers are guaranteed 50-80K a year and full benefits to carelessly throw bags on planes because you have strong-armed the company into agreeing to labor wages the market can’t bear.

    Small oversight, I understand.

    • Evil_Otto would rather pay taxes than make someone else rich says:

      .but conveniently you forgot the part where unskilled laborers are guaranteed 50-80K a year and full benefits to carelessly throw bags on planes because you have strong-armed the company into agreeing to labor wages the market can’t bear.shareholders don’t like.

      FTFY.

      • Evil_Otto would rather pay taxes than make someone else rich says:

        Ugh. Underline got stripped out. The last line should read “shareholders don’t like” without the other phrase.

    • philpm says:

      Really, you think baggage handlers are making 50K a year? A lot of pilots aren’t even making that! And no, I really don’t want to know what orifice you pulled that figure out of.

      • RogerX says:

        You’re right, I was being hyperbolic. The average baggage handler only makes 33k a year with benefits and pensions. And my source is payscale.com.

        • Gundy says:

          Thats pretty accurate. And they work the same type of hours as the guy at 7/11. Airlines are open on every holiday, usually with three shifts at each station. And they do pay for health care, its around $200/mo for family coverage with dental at one of the worlds largest airlines. And $33,000 is the huge income of $15.86/hr for having to work outside in all forms of weather, stacking bags in cramped bins, tearing up their knees, backs and shoulders. Not to mention standing in a bucket in a 10 degree windchill spraying glycol at an aircraft to make sure the plane can get off the ground safely in the middle of a snowstorm.

          Yup, definitely overpaid compared to the CEO who after getting $125,000,000 in concessions per year from their employees gets a $25,000,000 bonus the following year on top of their $9,000,000 salary. Yep those ramp monkeys are definitely overpaid.

    • Solkanar512 says:

      Uh, the employees of this company have taken major paycuts over the past few years. We’ve already seen what happens when we cheapen wages for airline workers.

      http://www.pbs.org/wgbh/pages/frontline/flyingcheap/

      But please, continue to whine and moan that people working terrible hours traveling all over the country in high risk positions as making a decent wage. Tell me, why is $33k/year too much for someone working rotating shifts outside in a dangerous and deadline intensive environment?

  10. Bad_Brad says:

    Remember this is an AIRLINE we’re talking about.

    This is probably the single best financial investment they ever made.

  11. u1itn0w2day says:

    Ooops. Forgot about that.

    The real question should be what else did they ‘forget’ about.

    Also wonder how much even 20 million would’ve helped just 2 years ago when fuel prices were going through the roof.

  12. raytube says:

    and they fly to that corporate residence on private jets! I personally admire the bravado and success of the AA execs. It’s the new way to succeed in business! As long as they get to keep their bonuses, I’m fine with it. Lots of good swimming pool maintenance companies are depending on it.

    • econobiker says:

      “private jets”

      I am sure those specific jets are somehow listed among the more typical AA jetliners used to transport paying customers- but with an asterisk or something next to the serial number or FAA call letters.

  13. oldwiz65 says:

    Probably used by the executives..perhaps to entertain Congressmen friendly to the airlines?

  14. gparlett says:

    They purchased the home for $2million and it’s now worth $30 million. Maybe they should sell this asset as part of the bankruptcy, but one of my friends who works at AA calls it the best investment the company has ever made.