How Hertz’s CEO Blew It, And Why Friday Is Make-Or-Break

by Gary Leff

hertz rental car desk
May 19 2020

At the end of April Hertz was looking at a large payment on $17 billion in debt. Their loans are backed by their fleet of vehicles, but the plummeting value of used cars meant Hertz had to make up the difference in cash. Lenders didn’t want to force them into bankruptcy, though, believing debt would have a better shot getting paid if the rental company continued as a going concern.

Hertz has a deadline of May 22 to develop a financing plan – but the lack of financing is an own goal, since their CEO walked away from up to half a billion in cash back in March.

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Two Air China Pilots Standing In The Cockpit During Takeoff

by Gary Leff

May 18 2020

Chit chat while being towed doesn’t actually violate the U.S. sterile cockpit rule that only activities necessary for safe operation of the aircraft can be carried out when below 10,000 feet (technically, during critical phases of flight). However they’re being recorded.

What’s unusual is standing in the cockpit for takeoff. U.S. rules are clear that pilots must be belted in at the controls, and everyone else has to be belted in for takeoff and landing. There is no standing in the cockpit.

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Fact Check: Does Flying Actually Put You At Risk For COVID-19?

by Gary Leff

May 18 2020

With air travel down over 90% since the start of the pandemic you might expect that flying is a primary mechanism for transmitting the SARS-CoV-2 virus. It’s not.

Two months ago I wrote that it’s safer to travel than you think. I wasn’t telling you to travel, and older people with pre-existing conditions I think probably shouldn’t. However actual risk of travel differs greatly from the perceived risk. That’s been borne out by research, and now endorsed by research experts as well.

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Just One Person Has Been Living In The W Barcelona For Two Months, Like In A Twilight Zone Episode

by Gary Leff

May 18 2020

One man has spent the past two months living in the W Barcelona hotel. He’s in charge of maintenance. The property closed in mid-March but Daniel Ordoñez stayed inside. He “agreed to self-isolate inside in order to avoid any deterioration of the premises that could delay its reopening, whenever that might be.”

At first he thought he’d be there for two weeks. It’s been more than eight. He lives by himself on the 24th floor of the hotel, and cooks his meals alone in the huge hotel kitchen. He washes his socks in housekeeping’s gigantic industrial washer.

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Which U.S. Airlines Are Most Likely To Wind Up In Bankruptcy?

by Gary Leff

british tail plane
May 18 2020

According to financial markets, the major U.S. airline most likely to wind up in bankruptcy is American, followed by United.

At this point the big airlines talk about how much cash they have to make it through this year. But that’s not the issue. After $58 billion in subsidies allocated to commercial airlines, airlines will make it through 2020. The question is what happens in 2021.

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Thai Airways Expected To File For Bankruptcy

by Gary Leff

May 18 2020

Thai Airways is majority government-owned, and a government panel has recommended that the airline restructure in bankruptcy. The Thai cabinet will consider bankruptcy for the airline on Tuesday.

Thai has lost money every year since 2013, in some of the very best times for the airline industry. It doesn’t just need a cash bridge to survive until the pandemic passes.

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Interesting Qatar Airways Elite Status Match Offer

by Gary Leff

first class beds
May 18 2020

Qatar Airways has a really interesting status match opportunity. I flag this because mid- and top-tier elite members of Qatar Airways Privilege Club do not just get American Airlines Admirals Club access even on domestic itineraries, they receive access to American’s Flagship lounges, too (once those re-open of course).

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President Obama’s Chief Economic Advisor: Airline Bailouts Were “Dumb,” Had No “Conceivable Logic”

by Gary Leff

May 17 2020

Larry Summers was President Obama’s chief economic advisor, Bill Clinton’s treasury secretary, and President of Harvard University. He’s one of the smartest people on the planet his arguments, both when you agree or disagree, are force to be reckoned with.

Summers explains that by trying to keep all of the airlines alive, you assure that they all have excess capacity and that they’re all unprofitable. That has long-term consequences for the whole economy, “the failure to allow the appropriate economic adjustment is kind of the mistake that Japan made in the 1990s. We need as we realize how long this is going to play to be aware of those risks.”

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