quote:

Originally posted by Balzé Halzé:
See the article I posted on the previous page. The big three will likely be just fine.

Direct quote from the OP...
<snip>
Airlines for America, which represents carriers including Delta, United, American and Southwest, have recommended passenger carriers immediately receive up to $25 billion in grants to compensate for reduced liquidity and in the medium term $25 billion in low- or zero-interest loans.
</snip>

I took a quick glance at articles about Delta and United recently. Seems both of them have reported record earnings last year. As of Dec 31 Delta had $8.2B in Current Assets ($2.9B in cash). United had Currest Assets of $8.2B and cash of $2.7B.

They can also eliminate dividends and worse case file for Chapter 7. Not a big deal, that will allow them to restructure.

I am sure the Big 3 spent a big pile of money on share repurchases as well. I didn't dig into their financials enough to see what capital stock they have, but that is also an option.

Maybe they should've bought back less stock and saved more for a rainy day?

quote:

Originally posted by RHINOWSO:
Truth is we need a thriving airline industry as an economy - just like we need an Interstate system (government funded).

I disagree.

There is already an incredible amount of tax dollars spent to support the flying infrastructure, as in the interstate highway system, but to support the airlines with bailouts is akin to subsidizing car makers and Uber to keep sales and traffic congestion levels up. The airlines using the infrastructure are not too big to fail, and propping them up will only lead to a bigger economic disaster down the road.

Our world has changed. Travel, education, commerce, and many other things may never return to quite the same normal. Health concerns of this scale are partly caused by the modern perks of easy worldwide travel, global population density, and lack of preventive measures. To try and subsidize the world to maintain global economies will be futile in the end.

Some businesses, business models, and lifestyles are about go to go the way of buggy whip makers, and unless it is vitally necessary to the health and safety of we the people, our government should let capitalism work, and stick to putting the plans and resources in place for unforeseen events like this.

last edited by dyno @9:33 am

You guys that said assistance should be for small business are 10x on target.

I just spent the evening with one of my girls. The restaurant she works at is on the verge of deciding to close for an as yet undetermined period of time. She will be out of work - and with hundreds of other restaurants closing - there will be little or no prospects. And business has been a ghost town the last handful of weeks. She is already living hand to mouth.

She is afraid. She just moved out in October - boldly declaring it was 'time' to face the big old world on her own. Being simple, I'm telling her to just come back home until this mania passes. She's tough to everyone she knows.

But I get to see the tears.

J, I would suggest to her it would be an excellent time to do online higher education with the idea to get a degree in a field she would wish to pursue for a career.

The airlines just had a Decade of Record Profits. Didn't put anything away for a rainy day?

If we bailout everyone and give parents Unemployment benefits to take care of their own children- We'll be a socialist nightmare Without Bernie Sanders even being elected.

quote:

Originally posted by RHINOWSO:
Truth is we need a thriving airline industry as an economy - just like we need an Interstate system (government funded).

I don't like hearing about ballouts, but the airline industry is crucial to the economy.

I know the old curmudgeons on the forum will rant "I haven't been on a plane since Pan Am and the hot stewardesses" and "I drive everywhere these day!!!".

I get it, but realize not everyone is drawing retirement, government funded Social Security, and can sit around complaining about stuff that won't affect them all day.

I.E., we are working for a living.

Without bailouts some of the airlines will be absorbed by others. The ones that survive will “thrive” just fine when the economy begins to recover. When there is demand for air travel there will be companies to provide service.

If they get bailed out, it should come with a permanent ban on all share buyback programs. Tough shit if you hold the stock as that it really a way for execs to get paid using "cheap borrowed" money.

Offer a dividend for shareholders or increase it instead of this buyback garbage.

The big 5 airlines over the last several years have directed 95% of free cash flow to stock repurchases. Boeing has had repurchase of around $100B. That being said the probability of a bailout is high.

I'd be slightly more sympathetic to the plight of the airlines if perhaps over the last 15 years I was treated better as a paying passenger

no bailout warranted

make sure the mom and pop small businesses stay in operation or as close to solvency as possible, also look after the local businesses - they're the backbone of this country

with the airlines, all you do is get boned for your money

my last three experiences with Delta were absolutely abysmal, my last two flights on Southwest make me never want to go near one of their aircraft again

quote:

Originally posted by Hay2bale:
Yes, Covid19 in the US is the Airlines fault.

No, it's not.

quote:

Originally posted by Hay2bale:
The airlines pack their customers in like sardines, to improve their profits.

Load factors are high. That means the ratio of full seats to empty seats. That means demands are high. Everyone wants to fly. Everyone wants cheap seats. Everyone wants to pay the least, get there the fastest, and have a seat when they want it. The airlines provide the volume; the passengers provide the demand. When did anyone last put a gun to your head and force you to fly?

quote:

Originally posted by Hay2bale:
They don't provide any filtration of the cabin air to reduce viral transmission.

Cabin air is changed completely every few minutes. The air is drawn from outside the aircraft, compressed, conditioned, and used to pressurize the aircraft. In order to maintain pressure, it's released at a rate that keeps the cabin pressure value constant. The exceptionally high volume means that the entire volume of air in the cabin continually being replaced with fresh air. You don't know it or notice it, but that's exactly what's happening. The cabin isn't simply full of air that's being recirculated, full of virus and disease.

The airlines didn't design the airplanes. Boeing, Airbus, McDonnel Douglas, etc, did that and continue to do that. The FAA, EASA, and others, set the standards.

quote:

Originally posted by Hay2bale:
They don't use ultraviolet light to kill viruses. My local Food Lion has ultraviolet lights at the entrance for this reason, why don't the airlines.

An airliner is not a "food lion," whatever that is. Placing ultraviolet light at the entrance (of what?) wouldn't alter the presence of a virus in a sick passenger. A passenger who is contagious or sick should not be flying. A passenger who is contagious or sick and does not know that they're sick, will still be contagious and sick after entering the airplane and passing through your "food lion" ultra violet light.

Hae you seen ultra violent "food lion" lights at the local theater? In a taxi? On a train? A bus? A ferry boat? Bowling alley? Church? It's important that the airlines copy the "food lion" in the design of an aircraft.

Does the "food lion" travel at 500 knots at 41,000' by chance? Or is it possible that not every aircraft needs to be designed like a "food lion?" Perhaps it has other criteria that are more important, in the complexity of design.

quote:

Originally posted by Hay2bale:
They pack the waiting areas and overcrowd the gates. They keep you in lines at the ticket gates.

Airlines don't build airports. Airlines don't design airports. Airlines rent gate space from municipalities and airport authorities and port authorities, who design and build airports. The airport authority assigns the gate due to space and availability. Airlines make seats available for transportation from A to B.

Passengers pack the gates. Airlines do not "overcrowd" them. Airlines do not put people at the gates. People do that. They choose to do that. The gate is the space provided by the airport authority for people to assemble, prior to boarding the aircraft. The airlines do not own the gates, design them, build them, or in most cases, get to choose which one is used. The airport does that.

Airlines do not keep you in line at ticket counters, or even baggage areas or desks. People elect to fly, people stand in line, waiting for other people. All those other people in line ahead of you? That is why you're standing in line. You're behind them. That's why it's called a line.

Every bag must be accounted, and weighed. Everything that goes on the airplane must be weighed. The airline's job is not to doctor you. not to entertain you while you wait your turn in line. The airline does not screen you for security. The airline is responsible for the safe conduct of the flight, which includes determining that the aircraft is within weight and balance limits. Your luggage is individually tagged. You may be asked questions. You may be asked to present ID. This takes time. How much time often depends on the preparation of the individual passenger. That family ahead of you with six steamer trunks, trying to round up their fifteen kids and seeing-eye llama? That's not the airlines fault.

If you're at the ticket counter, you didn't buy and check in online. There's a lot you could have done to cut down the time. The airline didn't make you do that. Or not make you. Your choice. Not the airline's fault.

quote:

Originally posted by Hay2bale:

If they wanted to spread disease, what would they do differently?

If the airline wanted to spread disease? They don't. It's a ridiculous question, but as you asked; the airline would hire sick people to stand in line, refuse to clean the airplane or decontaminate, spread infected items throughout the aircraft, not refrigerate the food or drinks, inject the drinks with bacteria or virus, or perhaps a million other things that the airlines don't do. But the airlines don't want to spread disease. They want to get you from A to B safely, which is the whole point.

If you don't want to spread disease, you won't get on the airplane when you're sick. Unfortunately, a lot of people ignore that simple concept.

quote:

Originally posted by Hay2bale:

How do you think Covid19 got to the US?

Ah, now that's an interesting question, isn't it? COVID-19 didn't. The virus, SARS-CoV-2, appears to have been transmitted from both bats and pangolin (ant eater), though the specific path is still unknown.

The first known patient, referred to as Patient-1 in the US, was a woman in her mid sixties who returned from China in January. She was symptomatic. Her husband, who did not travel to China, is identified as Patient-2, and was infected. The woman travelled on December 26th, and returned January 13. During her time in China, she regularly visited a relative who was hospitalized, and other family members who had an undiagnosed respiratory illness. One later was hospitalized with pneumonia.

The woman was not symptomatic while traveling. After returning from China, she presented at an outpatient clinic with fever, fatigue, and cough. She was hospitalized for pneumonia. Her symptoms began six days prior to admission to the hospital.

At that point, no one suspected she was sick or infected. All the "food lion" ultraviolet lights in the world wouldn't have stopped her from getting on the airplane, or getting sick later, or from transmitting the virus to her husband in Chicago. It didn't lead to her infecting everyone on the airplane, either. Had the airline have known she was infectious, the airline wouldn't have carried her. But it certainly wasn't the airline's fault, and it's a ridiculous assertion to suggest otherwise.

Patient-1 was reported January 23, and her husband, patient-2, on January 30. Note that she was reported as determined to have the condition 10 days after returning home from China. Others on the flight? Not.

Yet it's the airline's fault. Quite a stretch, there.

sns3guppy, there might be too much truth in there for Hay2Bale to swallow in one sitting.

quote:

Originally posted by RHINOWSO:
sns3guppy, there might be too much truth in there for Hay2Bale to swallow in one sitting.

Sorry. It's a character flaw wrought on by many years of being bounced off walls and thrown through plate glass windows for not eating my vegetables. I'll try not to let it happen again.

No no, it was well written - bravo.

Sometimes people need the big gulp of nasty medicine all at once and it was well deserved.

Not early as eloquent as sns3guppy, but here’s another truth. A lot of times when bad things happen people want someone to blame. Sometimes there is someone or something directly to blame. Sometimes there isn’t. In either case, it is usually better to put effort into dealing with the problem rather than worrying whose fault it is. When the problem is solved, maybe someone can be held to account, maybe not. Either way the problem is solved.

quote:

Originally posted by Hay2bale:
Yes, Covid19 in the US is the Airlines fault.

The airlines pack their customers in like sardines, to improve their profits. They don't provide any filtration of the cabin air to reduce viral transmission. They don't use ultraviolet light to kill viruses. My local Food Lion has ultraviolet lights at the entrance for this reason, why don't the airlines. They pack the waiting areas and overcrowd the gates. They keep you in lines at the ticket gates.

If they wanted to spread disease, what would they do differently?

How do you think Covid19 got to the US?

If you put fault on the airlines for this, I can't help you.

Do you blame cars? I drive 35 miles to work every day. 200 years ago, people didn't travel 35 miles in a whole week or month. Are cars to blame?

Epidemics spread. They spread 2000 years ago and they spread now. It may just be a little faster now.

“Food Lion” is a grocery store chain.

Back to the original topic, the airlines will get their bailout because they will claim the 1) airlines shutting down will reduce competition and raise prices, and 2) airlines shutting down will cost jobs. Very few politicians, especially Republicans, will want to be tagged with causing the loss of jobs. So, the airlines will get their bailouts, like everyone else. If the government had any balls, they would make the bailouts come with conditions that would hold the airlines responsible for the way that they’ve been conducting business and let themselves get into a financial position that made them more vulnerable and requiring a bailout.

I've actually taken advantage of the dip in ticket prices and new change fee rules by Delta by pretty much booking all of my flights out for the rest of the year this month. Delta will allow a one time itinerary change without a change fee for all flights booked between March 1-31, 2020. Due to the very unpredictable nature of my vessel's schedule, the day of crew change is never known for sure until a couple days before. We do know a year out though the week and around what day we will change so we can plan.

So with this Delta policy, I can book ahead and not worry about having to change my flight and incur a change fee at the last minute for the rest of the year. It's a not insignificant amount of money upfront, but it'll work out to my benefit in the end. And I'm doing my part to keep the economy chugging along.

quote:

Originally posted by midwest guy:
The big 5 airlines over the last several years have directed 95% of free cash flow to stock repurchases. Boeing has had repurchase of around $100B. That being said the probability of a bailout is high.

Anyone care to comment on this excellent point? There are a few theories behind share repurchases, but at the end of the day it help increase the EPS, with very little perceived downside. However, the big downside is that the airlines now have vast sums of stock that are worth way less than what they paid for them.

They could of course sell a lot of the stock they bought at higher prices. Basically at fire sale prices. You roll the dice and you take your chances with share re-purchases. The problem is they took their chances, and they don't have to suffer the consequences. The American people will bail them out. As a condition of the bailout, they should have to sell the stock they bought back for the last 10 years...including stock they gave away to officers/employees.

Well I am no economist and I do agree that CEO’s use stock as an easy cheap way to bump compensation. I love CEO’s who take salary cuts knowing full well that salary is the smallest fraction of their compensation. It is doubly disingenuous because if that “cut” allows them to lever their employees to take pay cuts the BOD will more than make ups their salary cut in their yearly bonus. BS.

Back to the point. My very basic understanding is no large corporation keeps large, extremely large, in this scenario of cash on hand due to hostile takeovers. Literally a company can buy another company and largely fund it using the taken over companies funds. Very predatory and very unethical. But legal. Corporations tend to not make themselves appealing to this scenario.

Not a lawyer so feel free to correct if I am wrong.

AA, are being pricks to me. I used a shit load of miles for a trip next month. Obviously I am having to move my flight and trip to later in the year. I paid $300 (for both ways) for an exit row seat as it's a direct 8.5 hour flight. I was told last night, after waiting 3 hours for a call back, that I'll more or less lose that money and have to pay again. To me they should just move the flight, the money I spent on exit row seating and be accommodating, nope. AT the end of the day it isn't a big deal at all given the circumstances, it's just a bit rich for my taste.