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America's bailed-out airlines are not 'playing fair' with customers

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Re: America's bailed-out airlines are not 'playing fair' with customers

#71

Post by mrfusion »

foldr wrote: post #65
chki wrote: post #22

Earlier quoted context omitted.

How could an airline company possibly be equipped to handle this kind of situation? If you want to be competitive on the market you need to lower costs and cut down on margins. You can't just have a big pile of money lying around "in case all flight is halted for a few weeks/months"

>You can't just have a big pile of money lying around "in case all flight is halted for a few weeks/months" That's what insurance is for. If an airline can't afford to buy adequate insurance, then it isn't actually a profitable businesses. If market pressures make it impossible for airlines to run operations in a financially responsible way, then that may illustrate the fact that markets don't always create the best…

Pandemic insurance? Lack of customers insurance? Do they sell that?

Re: America's bailed-out airlines are not 'playing fair' with customers

#72

Post by catalogia »

sjm-lbm wrote: post #54
gambiting wrote: post #25

Earlier quoted context omitted.

UK government bailed out Rolls-Royce by nationalising it, turned it into a successful company, and then privatised it again 18 years later(there's a common argument made that perhaps it was nationalised for too long, but the effect was certainly positive).

I'm not sure the UK nationalizing car companies is a great example that we should be looking at - via British Leyland, they nationalized a lot of brands that never really recovered (Rover, Triumph, Austin, etc.).

> car companies

It wasn't about cars, it was about jet engines. The original Rolls-Royce produced both cars and airplane engines and was nationalize in 1971. The automobile part of the business was sold by the government two years later in 1973 as Rolls-Royce Motors while Rolls-Royce Limited produced jet engines and remained nationalized for 18 years.

Today Rolls-Royce is the second largest manufacturer of jet engines, after GE.

Re: America's bailed-out airlines are not 'playing fair' with customers

#73

Post by adventured »

Scoundreller wrote: post #58
ceejayoz wrote: post #51

Earlier quoted context omitted.

We made a profit overall in the program that included GM/AIG's bailouts. https://www.nytimes.com/2014/12/20/business/us-signals-end-o... > In all, through TARP and other efforts, taxpayers injected $426.35 billion into banks and auto companies. The sale of stock and interest payments brought in $441.7 billion.

If you made a 3.5% profit (total, not per annum) on your incredibly risky investments between early 2009 and 2014, that's a fail.

You're only counting the dollar return. As a social institution of government, you'd want to price in the upside of not having the US auto manufacturing industry implode, with vast unemployment, lost manufacturing that would never return, and GM itself collapsing along with its jobs. It's considerably beyond your figures.

Alternative, nationalize it? Now that's a real disaster, having the US Government in the auto manufacturing business.

Regardless it's extremely low on risk in fact. That's partially magic printed fun dollars paid for via the Fed's obese balance sheet.

And that's exactly where the latest monster stimulus is going to come from. We most certainly are not paying down any of that debt, it only rolls one direction for the past ~18 years. We'll plop trillions more onto the Federal debt, push interest debt yields lower over time to compensate, and wake up tomorrow to a bright sunny day like it never happened (rinse and repeat until some day, 20 or 30 years into the future, when we can't keep doing it).

Re: America's bailed-out airlines are not 'playing fair' with customers

#74

Post by TrinaryWorksToo »

nickff wrote: post #63
jacobolus wrote: post #48

Earlier quoted context omitted.

These companies have made incredible profits for many years by nickel-and-diming customers, squeezing employees, and ignoring large-scale environmental costs, and then diverted the proceeds into the pockets of a small number of extremely wealthy people instead of using it to prepare for possible shocks. If the people are going to bail them out, the people should get an ownership stake.

The airline industry is famously unprofitable; they make a bit of money for a few years, then lose all that money, and repeat the cycle. From what I understand, it has been this way for at least 40 years. https://www.mcgill.ca/iasl/files/iasl/ASPL614-Five-Reasons-A...

Maybe that's telling us something.

Re: America's bailed-out airlines are not 'playing fair' with customers

#75

Post by greedo »

nickff wrote: post #63
jacobolus wrote: post #48

Earlier quoted context omitted.

These companies have made incredible profits for many years by nickel-and-diming customers, squeezing employees, and ignoring large-scale environmental costs, and then diverted the proceeds into the pockets of a small number of extremely wealthy people instead of using it to prepare for possible shocks. If the people are going to bail them out, the people should get an ownership stake.

The airline industry is famously unprofitable; they make a bit of money for a few years, then lose all that money, and repeat the cycle. From what I understand, it has been this way for at least 40 years. https://www.mcgill.ca/iasl/files/iasl/ASPL614-Five-Reasons-A...

Coincidentally, this occurred as the airline industry became deregulated.

Re: America's bailed-out airlines are not 'playing fair' with customers

#76

Post by bilbo0s »

thewebcount wrote: post #62
the8472 wrote: post #53

Earlier quoted context omitted.

Cheap air travel facilitated the global spread of the virus, they're not exactly innocent bystanders.

Small, dense living quarters facilitated it too!

Living quarters facilitate local spread.

Trains and cars facilitate national spread.

Planes and ships facilitate global spread.

Each of these has adjutant consequences of increasing severity. With planes and ships imparting the most severe consequences. Difference between planes and ships being that ships have medical staff, and you can quarantine them in port if necessary. Which we did mostly. (Of course, we probably should have done the same with airliners but hindsight is always 20/20).

Re: America's bailed-out airlines are not 'playing fair' with customers

#77

Post by Klinky »

oh_sigh wrote: post #59
the8472 wrote: post #53

Earlier quoted context omitted.

Cheap air travel facilitated the global spread of the virus, they're not exactly innocent bystanders.

Cheap car travel facilitated the global spread of the virus. They're not exactly innocent bystanders. Globalization facilitated the global spread of the virus, anyone with an international supply chain is not exactly innocent bystanders. Social activity facilitated the global spread of the virus. Meetup.com is not exactly an innocent bystander. etc...

All true statements.

The same criticisms can be applied to any businesses within these industries initially looking to be given billions in monetary grants without equity in return.

Re: America's bailed-out airlines are not 'playing fair' with customers

#78

Post by MrBuddyCasino »

nickff wrote: post #63
jacobolus wrote: post #48

Earlier quoted context omitted.

These companies have made incredible profits for many years by nickel-and-diming customers, squeezing employees, and ignoring large-scale environmental costs, and then diverted the proceeds into the pockets of a small number of extremely wealthy people instead of using it to prepare for possible shocks. If the people are going to bail them out, the people should get an ownership stake.

The airline industry is famously unprofitable; they make a bit of money for a few years, then lose all that money, and repeat the cycle. From what I understand, it has been this way for at least 40 years. https://www.mcgill.ca/iasl/files/iasl/ASPL614-Five-Reasons-A...

It used to be that way. Recently airlines have been profitable enough to have no better idea what to do with their money than buying back stock for billions of dollars.

Re: America's bailed-out airlines are not 'playing fair' with customers

#79

Post by oh_sigh »

nickff wrote: post #63
jacobolus wrote: post #48

Earlier quoted context omitted.

These companies have made incredible profits for many years by nickel-and-diming customers, squeezing employees, and ignoring large-scale environmental costs, and then diverted the proceeds into the pockets of a small number of extremely wealthy people instead of using it to prepare for possible shocks. If the people are going to bail them out, the people should get an ownership stake.

The airline industry is famously unprofitable; they make a bit of money for a few years, then lose all that money, and repeat the cycle. From what I understand, it has been this way for at least 40 years. https://www.mcgill.ca/iasl/files/iasl/ASPL614-Five-Reasons-A...

Why does anyone put their money into airlines then?
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