3 ms·
>Rather than requesting bailouts and rule changes, imo they should be selling that stock to raise capital. This strategy has already been kneecapped by plummet
by koboll 7y ago
>Rather than requesting bailouts and rule changes, imo they should be selling that stock to raise capital.
This strategy has already been kneecapped by plummeting share prices, and trying to sell massive amounts of shares right now would only lead to even further diminishing marginal returns.
Airlines are a crucial national infrastructure, and they know this, which is why they've been incentivized not to give a shit about recession resistance. Bailouts are fine, as long as they are coupled with corrective action. Those who accept them should be unable to buy back stock in the future, and required to build up the capital reserves necessary to weather another pandemic.
- throwawayjava 7y agoAnd it's not like this is totally unprecedented. That's exactly what we did with banks in 2008.
- dforrestwilson 7y agoA patently bad argument. No company was forecasting a pandemic in their 5-year plan. Doesn’t mean American or any other firm should receive special treatment. American Airlines alone has a market cap today of $4.7B. They could dilute by 20% and stay alive.
- bgorman 7y agoYou know what is an alternative plan with built in protections for creditors that will redoubtably watch the restructuring more closely than congress? Bankruptcy. United Airline's value is not in its people, or its service, or its business model. The value is in its airplanes, its exclusive rights to fly to some airports and lobbying prowess (Ever wonder why flights to LaGuardia don't fly to the west Coast? United). The creditors who take over United Airlines will not take the majority of these airplanes and send them to another country. If there is any value to United as an entity at all, Chapter 11 bankruptcy is what they need to go through, not congress. In chapter 11 bankrupcy new creditors will come in and punish the existing investors/executives who got United in this situation. If United truly has no value, chapter 7 is the way and United's assets will be repurposed the most efficient way possible for United's creditors and the economy as a whole. I frankly cannot think of a less sympathetic organization.