bailout

Tag Archives for bailout.

No, A Government Airline Bailout Wasn’t Necessary, And Just Makes Things Worse

by Gary Leff on March 30, 2020

hand holding hundreds of dollars in cash

Mar 30 2020

The U.S. airlines have long survived on government cash and government protection from competition (whether through foreign ownership, or long term gate leases at government airports). We continue to feed that, and then complain when effectively nationalized airlines don’t deliver the product consumers want. We have only ourselves to blame.

A bankruptcy-first approach would have meant equity and creditors take a haircut before taxpayers. It’s not at all clear a bailout would have been needed even then.

How The Federal Airline Bailout ‘Devalues’ Frequent Flyer Miles

by Gary Leff on March 29, 2020

Mar 29 2020

The Coronavirus Aid Relief and Economic Security Act of 2020 (CARES Act), which contained a nearly $60 billion bailout of the U.S. airline industry, has a curious affect on the value you will get for your airline miles and points.

United Airlines: Expect Layoffs In The Fall

by Gary Leff on March 27, 2020

Mar 27 2020

What United says is the reality of the industry. Fewer customers, fewer flights, will be serviced by fewer people. Allocating nearly $60 billion to the U.S. airline industry hasn’t changed that. It’s just delayed it to the fall.

U.S. Airlines About To Become Part Government-Owned

by Gary Leff on March 26, 2020

Mar 26 2020

Creating a mechanism for the money provided to airlines to be paid back is better than not, however it’s important for politicians not to meddle in the industry, forcing airlines to make decisions to please legislative constituencies rather than customers.

It’s Not Too Late To Say No To Bailing Out The Airlines

by Gary Leff on March 25, 2020

Mar 25 2020

The U.S. government can issue over $50 billion in loans and grants (and take non-voting equity positions in airlines in exchange for grants) under plans that have been sketched out so far. There’s also nearly $20 billion for airports and cargo airlines. It is not too late to stop this.

American Airlines President Robert Isom Says No Bailout Needed, Will Take The Money Anyway

by Gary Leff on March 19, 2020

Mar 19 2020

In London just in advance of travel restrictions going into effect, American Airlines President Robert Isom traveled across the Pond to speak to employees there. American employees nearly 1000 people in the U.K.

He spoke at the British Airways headquarters at Waterside, and said that while they aren’t going to spend “even a dollar” that they do not have to, they owe it to customers not to degrade the inflight experience and that the company is “prepared to weather any type of storms that come up and says there’s “enough cash on hand to weather downturns in the business.” And that was before they picked up another billion dollars just today. Still they want to ensure that if the government is handing out money, they’re well-positioned to get some.

Crazy Times Bring Out Dumb Ideas, and Nationalizing Airlines Is The Worst

by Gary Leff on March 18, 2020

Mar 18 2020

Former White House Chief of Staff and former Chicago mayor Rahm Emanuel is known for saying ‘never let a crisis go to waste.’ It’s an opportunity to push an agenda. So as the airline bailout train leaves the station some people are advocating the consumer protection rules that they wanted anyway. Others (like Alexandria Ocasio-Cortez) want the financial reforms they want anyway.

If you hate air travel you want to use this crisis to nationalize the airlines, an idea put forward by the left wing American Prospect.

Don’t Ban Stock Buybacks Or Impose Consumer Protection Rules As Part Of An Airline Bailout

by Gary Leff on March 18, 2020

Mar 18 2020

Airline bailouts are a bad idea. Stockholders should take a haircut before taxpayers. Airline bankruptcy does not present contagion risk to the economy. Airlines have flown through bankruptcy successfully – American, Delta, and United have all done it. And any help for workers should address the needs people face independent of industry.. Working for an airline isn’t ‘more special’ than some other job.

However there are very bad ideas circulating around new conditions to impose in exchange for a bailout.

Airlines Are Just A Bunch Of Pikers Asking For A Paltry $58 Billion Bailout

by Gary Leff on March 17, 2020

Mar 17 2020

The hotel industry met with the President today. The airline industry is asking for about $58 billion in subsidies.

What would Wag The Dog‘s Dustin Hoffman say about $58 billion? “This is nothing.” The hotel industry wants $250 billion.

When Everybody’s Bailed Out, Nobody Is