Bailouts (Airlines)

[neihn]

I have no pension what so ever, but I agree with pb4ski 'NO BAILOUT' - The execs must be responsible for their actions.

It is not fair for taxpayers (many without 401k savings or investments, yet tax payers, so don't tell me that those people get benefit for stocks buyback)

My 401k benefits greatly from those stocks buyback but I do believe in fairness.

 

[Lakewood90712]

Chapter 11 and debtor in possession financing. Stop rewarding the bad behavior.

THIS ^^^^^

The endless cycle of gov rescues have created weak businesses.

 

[ivinsfan]

Let's face it Boeing and the major airlines are untouchable. They know they are untouchable and the government will spend whatever they have to for a stable airplane/ airline situation.

Can't have a world where all airplanes the US needs have to come from Air Bus. Leaves us too vulnerable.

 

[Fermion]

I have no pension what so ever, but I agree with pb4ski 'NO BAILOUT' - The execs must be responsible for their actions.

It is not fair for taxpayers (many without 401k savings or investments, yet tax payers, so don't tell me that those people get benefit for stocks buyback)

My 401k benefits greatly from those stocks buyback but I do believe in fairness.

Everything seems tied together though. Letting a whole bunch of businesses fail is going to hurt our 401Ks AND it is going to hurt big pensions like Calpers, who have a large portion of their assets in the stocks and bonds of these companies. They sort of had to, because they were striving for 7%+ returns just like we were in our 401K.

It is unfair to bail out these pension funds if you are not going to bail out the 401Ks.

 

[Markola]

Let's face it Boeing and the major airlines are untouchable. They know they are untouchable and the government will spend whatever they have to for a stable airplane/ airline situation.

Can't have a world where all airplanes the US needs have to come from Air Bus. Leaves us too vulnerable.

At least Airbus is honest enough to acknowledge itself as a government partnership.

 

[pb4uski]

.... Can't have a world where all airplanes the US needs have to come from Air Bus. Leaves us too vulnerable.

I agree. But it doesn't have to be Boeing. It might be some successor company that buys Boeing's assets in the bankruptcy auction.

 

[gauss]

Just thinking out loud here, but maybe suggest that the airlines issue some stock (ie the opposite of buying it back) to generate some cash to get them through this. Is the majority of their need for cash to service their own debt?

 

[GravitySucks]

+1
Amazing we get Judgmental on people not saving anything, living paycheck to paycheck but never apply that standard to companies.
Maybe they blew it all on avocado toast.

No, but they should have kept some money for a rainy day rather than spend it on huge stock buybacks... now when they hit a big bump in the road they don't have what they need to absorb it.... and there should be consequences.

 

[neihn]

They sort of had to, because they were striving for 7%+ returns just like we were in our 401K.

So do my 401k, it gets hurt, and I dont even think 7% to begin with. If the pension funds look for 7%+ and now get hurt. So be it.

 

[Markola]

Preventing airlines from over-compensating executives and using emergency public bailouts to buy back stock did, in fact, help halt the multi-trillion (!) bill in the Senate. Airline execs released a letter begging for money and saying “trust us” but enough senators said “Yeah, right. We’ve seen this corporate movie before” to derail it. Here’s the letter: https://www.airlines.org/wp-content/uploads/2020/03/Hill-Letter.pdf

 

[Beststash]

You guys seem like you would just rather watch industries burn while toasting s'mores over the fire, even though it would send us into a depression that would decimate your retirement investments and force you to live in a tent in the woods.

I think access to capital is important but by loans not grants. A good example of why we shouldn't bail out business is the Cruise industry. Most cruise ships are foreign flagged in order to avoid US taxes. The networks are global. The staff is global. The customers are global. They might have an executive offices here but that's about it?



Contrary to popular belief.....Corporations are not people.

 

[Ready-4-ER-at-14]

I'm kind of wondering how much of the airline bonds could have been purchased for 50billion? I read that in oct of 2020 United had a net debt of 20 billion. southwest had a debt of 2.5 billion. American airlines has 34bil in debt in 2020.

I seems like the government could have declared it functionally bankrupt.. paid off all the debtors . and not made any of the stock worthless. plus taxpayers would actually own something meaning the assets of the companies if they go under again.

I hope at least some of the money is used to reimburse people cancelling tickets.

 

[Which Roger]

My feelings about bailouts in general: The 2008-09 financial crisis was caused mostly by companies taking on too much risk. That was (mostly) a free market, where companies who make bad decisions should suffer (e.g, by going under) and those who make good decisions should prosper. So bailouts were a bad thing there, except when they were the only option to prevent the innocent from suffering.


This time is different. The government is making (mostly justifiable in the interest of public health) decisions that are favoring some sectors and punishing others. It's much less of a free market, and companies have much less control over their destinies. I am not expert enough on any particular industry to say how it should be treated wrt bailouts, but I think a different perspective should be applied than was used in the great recession.

 

[Markola]

We’re admonished to run our personal finances as if we are CFOs. Why bail out companies who don’t have even six months of a cash emergency fund on hand?

 

[Chuckanut]

We’re admonished to run our personal finances as if we are CFOs. Why bail out companies who don’t have even six months of a cash emergency fund on hand?[/]

Excellent question