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I generally don't care if the current airlines survive. If their business model can't handle an emergency then we should let them fail. They can enter bankrup
by cwhiz 6y ago
I generally don't care if the current airlines survive. If their business model can't handle an emergency then we should let them fail. They can enter bankruptcy and someone or someones will come in, swoop up the assets, and start new airlines. It is not written in the stars that American Airlines, United, Delta, and Southwest get to be THE premier airlines for the United States.
Let them find their own way. Maybe next time the airlines won't use 96% of their cash flow on share buybacks.
I would also entertain the idea of loaning the airlines money at student loan interest rates. We can even defer payments until the pandemic is over, accruing interesting in the interim of course.
Or liquidate shares and sell them to the public treasury if they need the cash so badly.
Anything, legitimately anything, other than a bailout.
- jm20 6y agoThere isn’t a single business model out there that can survive a 90+% reduction in customers. That categorization is absurd. It would be like saying if Google can’t survive a sudden reduction of 90% of people using the internet it should fail. You can say what you want about bailouts but saying a “business model is bad” because of a once in a lifetime disaster is ridiculous.
- setpatchaddress 6y agoTwice in a lifetime, if you were born before September 2001.
- rhino369 6y agoThis is way worse than 9/11 for the airlines. Probably an order of magnitude worse.
- deleted 6y ago[deleted]
- cwhiz 6y agoPlenty of businesses keep many months of runway in cash for emergencies. Airlines spent 96% of their free cash flow, over the span of a decade, buying back their shares. Since you mentioned Google, they have over $100 billion in cash and could easily survive an interruption of this magnitude. Google could go to $0 in revenue and survive for many years. Having cash for an emergency is what a well managed and responsible business should do. Airlines don’t have any money because they were poorly run and greedy. Let poorly run and greedy businesses fail.
- slovette 6y agoThis. While the amount of runway can be debated, the sheer number of American powerhouse businesses that saw a single month of dipped revenue and started screaming for possible bankruptcy showed A LOT. The way we do business today is casually over leveraged and sold as normal. We are not building stable, 100-yr organizations that support people and their livelihoods. We’re building huge ATM machines that siphon massive amounts of future opportunity from a 1000 people and exchanges it for massive short term gain for 1-100 people.
- shalmanese 6y agoIt's not like some new owners coming in is going to find some magical humane business model that makes air travel actually good again. Airline behavior is a reflection of our revealed preferences and the reasons airlines are the way we are is because we all talk a good game about what we want flying to be but then become the ultimate capitalist bastards when we are asked to weigh our cash against our theoretically appealing goals. All a restructuring would do is bring airlines even closer to our revealed preferences, think if Amazon ran the airline industry. That means goodbye pilots unions, hello to rigid and punishing performance metrics. Goodbye any free perks, everything becomes a nickel and dime horror show. Goodbye any semblance of a collegiate relationship between regulators and carriers, there will be an out and out attempt to regulatorily capture the regulators.