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You can save the industry without bailing out the stock holders and bond holders, as those are three different things. So, what is important? 1. Maintaining a
by josephorjoe 7y ago
You can save the industry without bailing out the stock holders and bond holders, as those are three different things.
So, what is important?
1. Maintaining a functional airline industry
2. Making sure the bondholders get back 100% of their loans?
3. Making sure shareholders don't lose their equity stake?
I would agree that #1 is important.
- magduf 7y agoWell if airlines go bankrupt, that's a lot of assets that could be sold at fire-sale prices, and an opportunity for other surviving airlines to jump in and take over those planes and routes. Since China seems to have contained the outbreak, and probably have the economic power to do it, maybe they'll buy up a bunch of failed airlines...
- oarabbus_ 7y ago1 and 2 are important. 3 is not important. Shareholders should lose everything in a bailout, that's the deal when one decides to buy equity in a company.