Monthly Archives

Monthly Archives for April 2020.

Banks Are Cutting Credit Limits

by Gary Leff

credit cards
Apr 25 2020

A month ago I wrote that credit cards might soon become tougher to get as banks tightened lending standards. In a down economy there’s more risk that banks won’t get paid back, so it’s logical they’d become careful about extending credit. Already we’ve seen what appears to be a tougher approach to new small business cards at Chase.

When banks expect an increase in defaults, they take steps to limit their exposure. During the Great Recession we saw banks unilaterally cut credit limits, especially where cards were going unused or underutilized.

Continue Reading »

6 Reasons An “Immunity Passport” Isn’t Going To Work For Travel

by Gary Leff

Apr 25 2020

We do not need a vaccine to travel again. Widespread availability of a vaccine is probably two years away even if it’s developed in a year, since it has to be manufactured and distributed at massive scale. However a gimmick like an immunity passport, given our limited knowledge of the virus right now, isn’t likely to get us back in the sky.

So don’t get infected just because you think recovering from the virus will help you to travel, because it probably won’t.

Continue Reading »

Airlines All Over The World Are Having Success At One Thing – Getting Governments To Give Them Money

by Gary Leff

lufthansa plane
Apr 24 2020

While there’s no doubt that airlines are struggling in the face of a sudden evaporation of demand for their product, what’s especially striking about this moment is the success airlines are having at the political game given that public health concerns might take budgetary priority – such as prioritizing funds for hospital beds, protective equipment, ventilators (which don’t appear to do much good) but just as importantly for treatments and ultimately vaccine research.

Continue Reading »

Italy Plans To Nationalize Alitalia In June, Consider Leaving SkyTeam For New Alliance

by Gary Leff

alitalia plane
Apr 24 2020

Italy has been pumping cash into perennial loss-maker Alitalia for years, despite European Union rules against subsidizing a national carrier. Other airlines have burned through capital with ownership stakes in the airline – Air France and Etihad – but they’ve been burned and other carriers were gun shy to take over given losses of 2 million euros a day even before things began going down hill for the entire aviation industry.

The Italian government wouldn’t stand up to the airline’s unions, and without lowering costs no one was willing to come to a deal to take over the failed airline. Now they’re going to nationalize the carrier and they claim that will make it profitable. They will also consider dropping their partnership with Delta.

Continue Reading »

Airport Uses A Bulldozer To Block Virgin Australia Plane From Departing

by Gary Leff

Apr 24 2020

While Deloitte, as administrator, seeks to find new money to restart the carrier, it’s also going to be restructuring the airline’s debts. Since Virgin Australia reportedly owes about US$10 million to the Perth airport in unpaid fees, the airport decided to block a Boeing 737-800 from taking off as a way of physically securing their claim – using a bulldozer.

Continue Reading »